Foreign capital is entering the market at a fast pace: hedge funds are buying Chinese stocks at the fastest rate since the end of June.

The Chinese market continues to see strong buying from foreign investors. According to data from Goldman Sachs Prime Brokerage, global hedge funds are buying Chinese stocks at the fastest pace since the end of June. Goldman Sachs analysts stated that this stock buying is primarily being driven by long positions, with short covering coming second, at a ratio of about 9:1. China is currently the market with the highest net buying in the Prime business since August. Goldman Sachs' Prime service is specifically designed for hedge funds and other institutional traders. Currently, hedge funds among Goldman Sachs' clients are over-allocated to the Chinese market by 4.9% compared to the MSCI World Index. Chinese stocks account for 5.8% of the total position and 7.3% of the net position. Among these, individual stocks and macro strategy products both saw net buying, accounting for 58% and 42% of the total net buying respectively. This highlights the overall bullish outlook that global investment institutions have on the Chinese market.