Chinese fund managers boosted their recommended equity weightings in January to a 27-month high on optimism over the economic outlook and prospects of continued capital inflows, the latest Reuters fund poll showed. The average recommended stock weighting over the next three months jumped to 85.8 percent from 81.9 percent a month earlier, according to the monthly poll of nine China-based fund managers conducted this week.
They slashed suggested allocations for bonds to 4 percent from last month's 5.8 percent, and reduced recommended cash holdings to 10.2 percent from 12.4 percent.
"All eyes are now on what policies the new leadership will roll out," said one of the fund managers, who declined to be identified. "Clearer economic policies would increase investor confidence further."
New policies are expected to be unveiled after China's Communist Party Congress to be held in March.
The CSI300 index of top Chinese companies has surged around 25 percent over the past two months.
China's economy has already showed signs of strengthening. Gross domestic product grew 7.9 percent in the fourth quarter, snapping a streak of seven consecutive quarters of slowdown. Profits earned by China's industrial companies also jumped in December.
Also whetting investors' risk appetite is the expectation that foreign capital will keep flowing into the stock market.
China has been rapidly expanding a quota-based scheme that allows foreign investors to buy Chinese stocks and bonds. Top securities regulator Guo Shuqing said this month that the Qualified Foreign Institutional Investor (QFII) programme can increase 10 times, boosting market confidence.
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