(Yicai) May 20 -- More and more offshore capital has flown into Chinese assets since the beginning of the year as cornerstone investors are bullish on high-quality Chinese stocks, according to executives at Swiss banking giant UBS Group.

“We have noticed that some of the world’s major funds have begun to increase their focus on Chinese assets since January,” Cheng Ge, co-head of global investment banking at UBS, said at a media briefing yesterday.

The main reasons for this increased interest are that Chinese assets are relatively undervalued, and China continues to introduce favorable policies that help certain industries to improve profitability, Cheng explained.

Offshore funds opt for Chinese companies that are leaders in their niche sectors, have good operating quality, and boast strong profitability, cash flow, and dividends, according to Cheng.

Cornerstone investors subscribe to about half of the shares offered offshore by Chinese companies sponsored by UBS as they vie for high-quality stocks, UBS’ China President Janice Hu said at the media briefing.

Hong Kong has become one of the preferred destinations for Chinese companies operating overseas to raise capital offshore, as listing policies are continuously optimized, Hu noted.

Twenty-two companies have listed on the Hong Kong Stock Exchange so far this year, raising HKD24.3 billion (USD3.1 billion), up 29 percent and 195 percent, respectively, from a year earlier, according to data from Wind Information.

Having shares listed both in the Chinese mainland and Hong Kong is also becoming increasingly popular among Chinese firms, Hu added.

“Some of the companies listing in Hong Kong have already achieved a leading position in the Chinese mainland market and have some presence abroad,” Cheng said. “Listing in Hong Kong is an important part of their overseas business development.”

These firms usually hope that a listing in Hong Kong will help them acquire partners and attract global talent, he added.

Editor: Futura Costaglione