Finance & Economics

Global Exodus From Chinese National Equities Shows Growth

Foreign financial managers are leaving posts in some of their largest companies in China’s technology sector.

Global Exodus From Chinese National Equities Shows Growth

This process is observed against the background of the trend of global capital outflow from the national stocks of this Asian country. Experts say that this negative dynamic is currently showing an increase.

Data from EPFR Global and Morgan Stanley indicate that fund managers in the United States and Europe have sold Chinese securities worth $1.6 billion. This figure was recorded against the background of the outflow of funds for $3.5 billion last month. As part of this negative trend, technology companies such as Tencent Holdings, Alibaba Group Holding, and, suffered the biggest damage. The relevant information is contained in the report of Morgan Stanley strategists led by Gilbert Wong and Laura Wang, which was published last Thursday, October 19.

Stock indexes of the world’s second-largest economy are currently in difficult straits, which can be conditionally designated as a situation consisting of difficulties. These problems are being fixed against the backdrop of a multitude of stimulus measures introduced by the Chinese government. Also, the stock indexes were not favorably affected by the process of improving economic data in this country.

The CSI 300 index of mainland Chinese stocks has shown a decline of more than 4% since the beginning of October. On October 19, this indicator dropped to an 11-month low. The index of American depositary receipts of the Chinese company Nasdaq Golden Dragon decreased by 7%.

Morgan Stanley strategists believe that investor sentiment towards the securities of this country will be unstable in the foreseeable future. Also, in their opinion, the outflow of foreign funds will continue in the near prospect if the macroeconomic situation does not improve, government stimulus measures do not strengthen and additional stable support for market liquidity does not appear.

Morgan Stanley data shows that TAL Education Group is the only Chinese company whose shares are being sold, which has demonstrated an impressive net inflow of funds over the past month.

As we have reported earlier, China’s Exports and Imports Show Slowdown in Contraction.

Serhii Mikhailov

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Serhii’s track record of study and work spans six years at the Faculty of Philology and eight years in the media, during which he has developed a deep understanding of various aspects of the industry and honed his writing skills; his areas of expertise include fintech, payments, cryptocurrency, and financial services, and he is constantly keeping a close eye on the latest developments and innovations in these fields, as he believes that they will have a significant impact on the future direction of the economy as a whole.