Global funds abandon China blue chips in $12.6 billion sell-off
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Overseas funds have offloaded the equivalent of US$9.3 billion of Chinese blue-chip stocks in a 12-day run of withdrawals through Tuesday.
PHOTO: REUTERS
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SHANGHAI - Global investors have been shedding China’s blue-chip stocks in what has been a record-selling streak, showing even the nation’s industry leaders are falling out of favour as a rout deepens.
Foreign investors sold 6.2 billion yuan (S$1.2 billion) of Kweichow Moutai from Aug 7 to 18, making China’s largest liquor maker the most heavily sold stock via trading links with Hong Kong. It was followed by 4.7 billion yuan of selling each for leading renewables stock LONGi Green Energy Technology and major lender China Merchants Bank, according to the latest data available on Bloomberg.
Overseas funds have been fleeing the mainland market, offloading the equivalent of US$9.3 billion (S$12.6 billion) in a 12-day run of withdrawals through Tuesday, the longest since Bloomberg began tracking the data in 2016. Their departure comes as a prolonged housing slump raises the risk of broader financial contagion, making the nation’s equity benchmark among the worst global performers in August with a 7 per cent loss.
The CSI 300 Index is now trading near the lowest since November, as optimism following the July Politburo meeting quickly evaporated. Foreigners had moved into the market en masse back then, only to leave again now in droves as economic data continues to disappoint and stimulus fails to impress.
The 10 most-sold stock by foreigners in the latest rout were among the 50 largest ones on the CSI 300. Major distiller Wuliangye Yibin, Ping An Insurance Group and electric vehicle maker BYD saw selling of at least 2.9 billion yuan each through Aug 18.
An analysis by Bloomberg Intelligence also shows emerging market funds have turned more bearish on Chinese stocks, deepening their average underweight position to almost 100 basis points as at the second quarter from 24 basis points three months earlier. They were overweight by 40 basis points as at end-2022.
The selling streak is showing little sign of cooling. Overseas funds had shed more than 7 billion yuan again as at mid-Wednesday.
A top-performing Chinese macro hedge fund blamed global capital for sinking the country’s stocks, calling them a “bunch of aimless flies” that stir up market volatility. That said, foreign funds own less than 4 per cent of total A-shares outstanding, according to a report this month from China International Capital. BLOOMBERG
