AsianFin -- Kevin Sneader, President of Goldman Sachs Asia Pacific (excluding Japan), told media on Wednesday that clients and investors are showing greater confidence in Chinese stocks, and that the recent rebound is underpinned by substantial retail savings and increasing hedge fund inflows.

Since September last year, China’s stock market has rebounded sharply, with the Shanghai Composite Index rising over 40%, including a 17% gain so far in 2025. Despite a brief pullback this week, Goldman Sachs expects that the combination of improved sentiment and abundant household savings could continue to support market growth.

Sneader highlighted that retail investors, who collectively hold RMB 160.9 trillion in deposits, remain a key driver of the market, while hedge funds are beginning to increase allocations to Chinese equities. This optimism aligns with forecasts from J.P. Morgan, which predicts that an additional RMB 2.5 trillion in savings could flow into the market by the end of 2026, potentially lifting stock prices by more than 20%.

Even with short-term volatility, Goldman Sachs’ positive outlook signals continued confidence from foreign investors in China’s stock market.