Chinese Funds Draw 76.7 Billion Yuan in Second-Largest Daily Inflow on Record
Key Facts
A basket of 9 exchange-traded funds favored by China’s “national team” attracted 76.7 billion yuan on Tuesday, November 3, the second-largest daily inflow on record, according to data compiled by Bloomberg and cited by The Edge Malaysia. The move came amid a wave of official support for Chinese stocks, as markets watched whether fund purchases and company plans to return capital to shareholders would bolster confidence. Trading in the nine funds reached about 83 billion yuan the following day, a level that exceeded activity in most sessions that quarter, according to the report. The figures showed continued activity in investment vehicles associated with national-team purchases. But flow data alone do not determine the market’s direction or prove that official support drove the gains in stocks.
The technology-heavy Star 50 index rose about 10% on Wednesday, November 4, its best session since July, according to the report. News that Chinese artificial intelligence developers might receive only a limited share of advanced Nvidia chips boosted demand for companies and domestic alternatives, the report said. It did not attribute the gains solely to fund inflows, presenting chip news as a possible additional factor. The CSI 300 also rose more than 2% in the same session. The report attributed part of the broader rebound in Asian markets to investors assessing the results of the U.S. midterm elections and viewing the recent selloff as excessive. Chinese stocks thus rose alongside domestic and regional catalysts, as fund inflows continued.
At the company level, CXMT’s chairman proposed on Wednesday increasing the size of its share buyback program to a range of 2.5 billion to 5 billion yuan. He said the move was aimed at protecting investors’ interests and boosting confidence. Controlling shareholders of Suzhou Dongshan Precision Manufacturing proposed returning at least 1 billion yuan to investors during 2026 through cash dividends and share purchases. Ningbo Joyson also proposed a share buyback worth between 150 million and 300 million yuan. Universal Scientific Industrial Shanghai and Huatson Technology also disclosed new buyback plans, the report said. The announcements come as Chinese companies seek to demonstrate their commitment to shareholder returns alongside official support measures.
The plans followed the People’s Bank of China’s announcement that it had cut the interest rate on its relending facility to 1% from 1.25% and made the program permanent, while encouraging banks to increase lending, according to the report. The facility is used to finance loans to companies seeking to buy back their shares, as well as loans to major shareholders seeking to increase their stakes. The central bank said Chinese banks had already applied for relending quotas exceeding 200 billion yuan. The approach combines bank financing directed toward buybacks with a direct increase in ETF inflows. National-team purchases through the funds began around mid-October and accelerated in recent sessions, according to Goldman Sachs analysts. The analysts added that cumulative inflows in the two weeks before their report exceeded the total recorded in April 2025.
The nine funds recorded weekly inflows of 128.7 billion yuan in the week announced on October 25, their highest since the April 2025 selloff, according to Bloomberg. Goldman Sachs analysts nevertheless said a sustained recovery remained uncertain because trading activity and investor sentiment had not shown convincing improvement. That caveat limits what can be inferred from the government buying wave and Wednesday’s rebound, as investors continue to monitor confidence and trading activity. In the latest official inflation comparison, China’s consumer price index rose 0.9% year over year and 0.2% month over month in September, according to the National Bureau of Statistics. Markets are awaiting the next monthly consumer and producer price index report, scheduled for November 9, 2026, at 09:30 Beijing time. The bureau said release dates are preliminary and subject to change, and scheduled monthly indicators relate to data for the previous month.