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Foreign investors’ trading and earnings in China’s stock market ——Evidence from Shanghai-Shenzhen Stock Connect

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  • Junkai Wang
  • Yaoxiang Nie
  • Baolei Qi
Abstract
Based on the trading data of Shanghai-Shenzhen Stock Exchanges from 2017 to 2020, we study whether foreign investors’ trading strategies have an impact on China’s A-share earnings. The results show that the net inflow of foreign capital is positively correlated with the return of A-share, and foreign capital prefers high-quality Chinese stocks. Foreign investors can operate accurately, buying at a low price and selling at a high price; A-share held by foreign investors can obtain excess earnings, and this effect will be amplified over time. This paper provides powerful inspiration for stock investors.

Suggested Citation

  • Junkai Wang & Yaoxiang Nie & Baolei Qi, 2024. "Foreign investors’ trading and earnings in China’s stock market ——Evidence from Shanghai-Shenzhen Stock Connect," Applied Economics Letters, Taylor & Francis Journals, vol. 31(20), pages 2161-2165, November.
  • Handle: RePEc:taf:apeclt:v:31:y:2024:i:20:p:2161-2165
    DOI: 10.1080/13504851.2023.2211332
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