Investors are dialling back risk exposure ahead of China’s Communist Party Congress in October and sticking money in the relative safety of mainland blue chips as they await signs Beijing is ready to address problems hanging over the economy.
The ChinaAMC China 50 ETF, the country’s largest exchange-traded fund, has witnessed a near 30 percent jump in its assets this month, channelling more than 10 billion yuan ($1.4bn) into Shanghai’s 50 biggest stocks.
That is driven by what some analysts term the “Beijing put”, the belief that authorities will keep markets stable ahead of the 20th Communist Party Congress, to be held from October 16.
But investors have little appetite to make bets about what happens beyond that event, which would see Xi Jinping anointed for a third five-year term as the supreme leader, and a shuffle of personnel on the decision-making Politburo.
It is a challenging time for the economy as authorities…