Chinese stocks experienced a slight decline on Thursday, February 13, 2020, but foreign investment remained strong. The Shanghai Composite Index fell by 0.71 percent, closing at 2,906.07 points. The Shenzhen Component Index also saw a decrease of 0.70 percent, reaching 10,864.32 points. Despite the overall market dip, technology stocks, including Fuzhou Rockchip Electronics Co Ltd, showed significant gains.
Sector Performance and Foreign Investment Trends
Several sectors demonstrated positive performance amidst the market decline. Precious metals, fertilizers, agrochemicals, and agriculture-related industries led the gains. Companies like Anhui Liuguo Chemical Co Ltd and Jiangsu Changqing Agrochemical Co Ltd reached the 10 percent daily limit. Tech shares, particularly those involved in photovoltaics and electronic components, maintained strong performance. Fuzhou Rockchip Electronics Co Ltd, along with Suzhou Good-ark Electronics Co Ltd and Tongwei Co Ltd, all hit the daily increase limit. Analysts at HeXin Tougu predict continued strong performance for tech and new energy stocks.
Foreign investment in China’s A-share market continued its robust trend. Approximately US$9.7 billion flowed into the market through the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect in the first six weeks of 2020. This influx represents almost 20 percent of the total foreign investment in 2019. The upcoming update to the MSCI China All Shares Index, including the addition of companies like Beijing-Shanghai High-Speed Railway, further reinforces the growing global recognition of the Chinese market’s openness. Guangfa Securities anticipates a sustained inflow of foreign capital, estimating an average annual investment of US$42.7 billion to US$56.9 billion over the next decade.
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STAR Market Performance and Autel’s Strong Debut
On the Shanghai Stock Exchange’s STAR Market, the majority of listed companies (51 out of 84) experienced gains. Autel Intelligent Technology Corp Ltd, specializing in automotive intelligent diagnostics, detection, analysis systems, and automotive electronic components, led the gains on the STAR board. This positive performance highlights the continued interest in technology companies, particularly those focused on the automotive sector. The successful debut of Autel, alongside the strong performance of Fuzhou Rockchip, underscores the potential for growth in the technology sector within the Chinese stock market. This positive trend, coupled with significant foreign investment, suggests a promising outlook for tech companies like Fuzhou Rockchip in the Chinese market.
