China is witnessing a record string of sales from foreign investors in blue-chip and blue-chip stocks, indicating that the companies driving the country’s industry have lost their appeal as losses deepen.
Offshore funds continued their withdrawal from the mainland market, selling $10.7 billion in a series of withdrawals that lasted for 12 days through Tuesday, the longest since Bloomberg began tracking the data in 2016.
The departure of these funds comes at a time when a prolonged slump in the housing sector increases the risk of a wider financial contagion, which made the country’s stock index one of the worst performers globally this month, with a loss of 8%.
Foreign investors sold up to 6.2 billion yuan ($851 million) worth of shares in Kuishu Moutai from Aug. 7 to 18, making shares of China’s largest liquor maker the best-selling in Hong Kong-related trading.
Also, 4.7 billion yuan worth of shares were sold in both leading renewable energy company Longye Green Energy Technology and major lender China Merchants Bank, according to the latest individual stock data available on Bloomberg.
best seller
The top 10 foreign selling stocks in the latest wave were among the top 50 stocks in the index. Major distillery Wu Liang Yibin, Ping An Insurance and Chinese electric vehicle maker BYD had sold at least 2.9 billion yuan each as of Aug. 18.
And the sales chain shows little sign of calming down. Overseas funds had withdrawn more than 10.5 billion yuan again as of mid-Wednesday.
One top-performing Chinese macro hedge fund blamed global capital for flooding the country’s equities, describing them as “a bunch of aimless flies” whipping up market volatility.
Yet foreign funds own less than 4 percent of the total A shares, according to a report this month from China International Capital Corp.
2023-08-23 16:25:26
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