(Yicai Global) Feb. 3 -- China's stock market slumped on its first day of trading after the Lunar New Year holiday as a result of the novel coronavirus pneumonia outbreak. But statistics showed that net inflow of overseas funds has already exceeded CNY18 billion (USD2.6 billion), the highest in a month. Many foreign investors see the near future as a chance to buy China's core assets at a lower price.

By midday today, the Shanghai Composite Index was down 8.13 per cent at 2,734.66 points while the Shenzhen Component Index dropped 8.27 per cent to 9,798 points, with the second-board market at the Shenzhen Stock Exchange declining 6.56 per cent to 1,801.28 points.

The decline in some stocks was only around 5 percent when the market opened, Wong Kok Hoi, founder and Chief Investment Officer of Singapore-based APS Asset Management, told Yicai Global, adding that investors did not sell out and many shares were still trading actively.

Wu Xiyan, equity fund manager at Fullerton China (Fullerton Fund Management's China branch) noted that the short-term impact caused by the outbreak also presented opportunities and A shares would remain one of the most valuable assets for residents over the next decade. The epidemic offers the opportunity to buy core assets at lower prices.

Jiang Yan, portfolio manager at JP Morgan Asset Management, said that the outbreak, geopolitics and trade risks would inevitably trigger A-share volatility, but China's transition from quantitative to quality-oriented economy would not change, and research-reliant long-term investors were taking advantage of the investment opportunities. The three major sectors of health care, consumption and technology are worth paying attention to amid China's long-term structural development trend, Jiang stated.

Many overseas institutional investors also noted that the epidemic's impact on the Chinese economy will most probably to be seasonal (quarterly), and the long-term valuation impact on good companies will be even less. The short-term decline in the stock market will more likely result from emotional factors or firms' lower-than-expected profits for the current year.

Editor: Zhang Yushuo, Peter Thomas