The recent surge in the Chinese technology market, particularly in the China Science and Technology Innovation Board—commonly known as the STAR Market—has opened a new chapter for investorsWith significant inflows of capital, the market is witnessing an upswing driven by advancements in Artificial Intelligence (AI) and the burgeoning robotics sectorA leading player in this transformation is the AI model DeepSeek, which has successfully showcased its capabilities, paving the way for broader applications in technology.

As stock indices rise, the Shanghai Composite Index has reported a notable increase of 0.97%, closing at 3379.11 pointsThe growth is evident among several indices, with the ChiNext and Shenzhen Component indices exhibiting over 2% weekly gains, and the STAR 50 Index experiencing a remarkable jump of 7.07%. Such trends indicate a healthy appetite for equity investment, especially in technology-related sectors, as many Exchange Traded Funds (ETFs) focused on robotics and AI have also seen substantial increases in value.

The focus on humanoid robots, particularly following the Chinese New Year, has elevated the interest surrounding these innovations in automationA significant index, tracking robot technology, surged by over 10.54% this week, with ETFs linked to this index attracting a flood of investments, resulting in considerable growth in their net asset valuesData from the Securities Times indicates that out of the 929 listed equity ETFs, an impressive 755 noted positive growth this week, which translates to over 80% of the rangeSpecifically, both the Harvest and Huaxia CSI Robot ETFs have led the pack with a 12.74% increase, reflecting robust investor enthusiasm for robotic technology.

Industry analysis suggests that there is a notable uptick in investments in the AI and robotics sectors, as emerging companies like DeepSeek are pushing the boundaries of robotic capabilitiesThe robotics industry is entering a vibrant phase, characterized by competition and innovation

Advertisements

As humanoid robots increasingly find applications in industrial settings, their relevance and utility have garnered recognition as a trending global phenomenon.

This week saw seven ETFs witnessing net inflows surpassing 500 million yuan each, with a strong concentration of investment directed towards technology and innovation fields, including AI, robotics, cloud computing, and data centersNotably, traditional sectors like alcoholic beverages, banking, and power generation have also attracted capital, showcasing a diverse investment landscape.

The Guotai Junan A-Share Securities Company ETF led the inflow charts with a staggering net inflow of 1.301 billion yuanWhile the trading volume reached an impressive 10.419 billion yuan, its net value only marginally increased by 0.67% during the weekConversely, the E Fund CSI Artificial Intelligence ETF and the Huaxia CSI Robot ETF reported net inflows of 1.3 billion yuan and 1.196 billion yuan, respectivelyThe resurgence of Shenwei's stock on February 21 also contributed to overall market enthusiasm, confirming it as a leading entity in China's intelligent computing chip domain.

Investors are currently gearing up for a more extensive influx of capital, evidenced by the recent performance of the STAR MarketThe STAR 50 Index saw a prominent rise of over 7% on February 21, igniting excitement in China's tech equity marketThe strong inflow is attributed to the completion of fundraising for the first batch of STAR index ETFs, which collectively raised over 20.4 billion yuan within five days, signaling a positive shift towards 'hard technology' investmentsThis infusion of capital implies that asset valuations within the market are likely to undergo favorable adjustments.

As evidenced by statistics from the Shanghai Stock Exchange, the STAR market encompasses a diverse group of companies, particularly in sectors like semiconductor manufacturing, power equipment, mechanical engineering, and pharmaceuticals

Advertisements

Related ETFs provide investors an accessible route to invest broadly in these burgeoning sectors.

However, caution remains as some investors opt to secure profits amid surging valuesFor example, the Huaxia STAR 50 ETF recorded a significant decline of 6.062 billion shares, with net capital outflows surpassing 8 billion yuanThis decline is particularly notable as it marks a decrease in shares from a peak of 115.2 billion to merely 73.015 billionOther products in this category, such as the E Fund and Industrial Bank STAR 50 ETFs, have also seen net capital withdraws of over 500 million yuan.

Apart from the STAR ETFs, semiconductor and chip-themed ETFs are experiencing significant withdrawal of funds, as demonstrated by the Guolianan CSI Semiconductor ETF, which observed net outflows reaching 2.032 billion yuan and a share reduction of 1.65 billion unitsSuch trends suggest a reallocation of capital towards clearer growth potentials in alternative sectors.

In parallel, the Hong Kong stock market has been rallying, riding the wave generated by high-profile collaborations, such as the partnership between Alibaba and Apple, which are expected to catalyze performance enhancements in the tech sectorIn the wake of this transformation, the Hang Seng Technology Index soared by 31.14% this year, reaching heights not seen in nearly three years, thereby boosting the profitability of related ETFs.

The top-performing ETFs this year are predominantly Hong Kong-based, with all of the fifteen ETFs boasting returns exceeding 30%. Notably, the Yinhua Hang Seng Hong Kong Stock Connect Technology ETF and Invesco China Technology ETF witnessed cumulative returns exceeding 36%. Companies such as Xiaomi, SMIC, Tencent, and Alibaba have all shown impressive gains in the market, with their median performance exceeding 58% within the year.

Southbound fund inflows have noticeably accelerated, with recent purchases accumulating to 51.212 billion Hong Kong dollars this week and a total of 203.403 billion Hong Kong dollars year-to-date

Advertisements

Advertisements

Advertisements