Momentum builds in China’s A-share market

Hi everyone. I’m Stephanie LI.Coming up on today’s programA-share market is poised for sustained bull run;Tencent’s stock soars to 4-year high on strong Q2 performance.Here’s what you need to know about China in the past 24 hours The signs of a bull run are slowly but steadily emerging in China's A-share market, underpinned by ongoing structural reforms and sustained long-term capital inflows. The Shanghai Composite Index rose for an eighth straight session on Wednesday, climbing to close at 3,683, its highest since December 2021. On Thursday, the benchmark index opened higher, hitting 3,700 points in early tradings, before heading down to close 0.46 percent lower.Nevertheless, investor enthusiasm is surging on both the institutional and retail fronts. The combined trading value at the Shanghai and Shenzhen bourses topped CNY2.15 trillion and CNY 2.28 trillion in the latest two sessions.July also witnessed a record monthly number of new mutual fund launches, reflecting rising interest among households in equity assets as returns from traditional savings and wealth management products continue to decline. Total assets under management in public mutual funds have now exceeded CNY34 trillion.Insurance companies are also ramping up their presence in the A-share market. The number of public disclosures triggered by insurers' equity holdings surpassing the 5 percent threshold has already exceeded last year's total. Analysts said insurers are increasingly focusing on companies from the emerging industries and advanced manufacturing sectors, supporting China's shift toward high-quality development.Retail investor participation is also rising. Nearly 14.6 million individual trading accounts were opened in the first seven months of 2025, a 37 percent year-on-year increase, according to data provider Wind Info.Furthermore, foreign investors have been steadily increasing their exposure to Chinese equities, including A-shares and Hong Kong-listed stocks. Net foreign inflows totaled US$2.7 billion in July, more than double the level in June, according to a recent report by Morgan Stanley.Analysts said the macro environment is becoming increasingly favorable for Chinese equities. Expectations of a weaker US dollar and potential interest rate cuts by the Federal Reserve are improving the outlook for emerging markets. The narrowing interest rate differential between China and the United States could further accelerate foreign capital inflows.Hong Hao, chief investment officer at Lotus Asset Management, said the upward momentum of Chinese stocks will sustain for a long time if the US dollar's weakness proves to be a multiyear trend. Also, the Chinese market has been increasingly resilient in the face of negative tariff headlines.Given the current favorable liquidity conditions in the Chinese market and the fear-of-missing-out sentiment, any corrections in the A-share market are likely to be quickly absorbed by buyers, he added.GBA expressAliExpress has upgraded its logistics hub in Dongguan, Guangdong province, into the Alibaba-owned marketplace’s first fully automated cross-border logistics park, media reported. The enhancement is expected to shorten package transit times by as much as six hours.Industry and company newsShares of Tencent Holdings climbed to the highest at HKD600 today in more than four years after the Chinese internet giant reported a strong financial performance in the second quarter of the year. Net profit widened 17 percent to CNY55.6 billion in the period, while revenue climbed 15 percent to CNY184.5 billion, both significantly beating market expectations. Th company reported double-digit growth in most segments. Gaming was a key driver, with mainland revenue rising 17 percent and international sales up 35 percent on the success of titles including "Honor of Kings" and "Dungeon & Fighter Mobile." Tencent has been increasing investment in AI. Capital expenditure in the latest quarter surged 119 percent to CNY19 billion, which was mainly spent on AI-related infrastructure.  Chinese ride-hailing giant Didi Global has invested in China's unmanned delivery vehicle company Neolix, although the amount is unknown, media reported citing people familiar with the matter. Neolix has deployed over 7,500 autonomous vehicles across more than 280 cities.RayNeo and Ant Group said today they have allied to launch the RayNeo X3 Pro AI glasses, the world’s first full-color smart payment glasses, enabling “just look and pay” without needing a voice assistant or entering an amount on Ant's Alipay.China's newly-added yuan-denominated loans rose CNY12.87 trillion in the first seven months of the year, according to data released by the PBOC yesterday. Of the total, CNY680 billion were household loans.China's data sector reached CNY5.86 trillion by the end of 2024, up 117 percent from the end of 2020, the National Data Administration told a press conference on Thursday. The number of data-related Chinese firms exceeded 400,000 as of the end of last year.China has allocated CNY188 billion from its 2025 ultra-long special treasury bond funds to support equipment upgrades across major economic sectors, the National Development and Reform Commission said on Wednesday. The funds will support about 8,400 projects, leveraging more than CNY1 trillion in total investment. Asia-Pacific highlightsLeading Australian wine producer Treasury Wine Estates (TWE) reported a 15.5 percent increase in its annual profit on Wednesday, amid a stabilization of exports to the major Chinese mainland market. The winemaker posted underlying net profit after tax of AU$470.6 million for the year ending June 30, according to the company. The Penfolds range delivered another strong result, reflecting a successful return to China for the Australian country of origin portfolio and continued positive momentum in a number of other key Asian markets, said TWE CEO Tim Ford.Bangkok’s Iconsiam shopping mall is hosting a Charming Shanghai Week event from Aug. 8 to 15, featuring a full-scale recreation of Shanghai’s famed Yuyuan Lantern Festival in Thailand for the first time. The event celebrates the 50th anniversary of diplomatic relations between China and Thailand.