Global hedge funds pulled out money from China and broader emerging Asian markets in November, amid a continuing slowdown in the world’s second-largest economy and persistent inflation in the region on the whole.
Long/short fund managers remained net-sellers of Chinese equities for a fourth consecutive month, US investment banker Goldman Sachs said, without revealing the figure. The outflows stemmed mainly from a reduction in long bets, it added.
This was also the ninth month of net outflows this year, the bank said, dragging emerging Asia to become the region with the largest net outflows across the world.
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Apart from China, Taiwan also recorded net outflows last month within emerging Asia markets.
Hedge funds rotated their positions to developed Asia markets, including Hong Kong, Singapore and Japan, which saw net purchases in the month.
South Korea saw the largest net inflows, Goldman Sachs said.
Breather for China A-shares
China’s CSI 300 Index declined 2% in November while Hong Kong’s Hang Seng Index fell 0.4%. In contrast, major global indexes saw a broad rally on US rate cut optimism.
This was the fourth-straight of losses for Chinese indexes, with sluggish economic data and turbulence in the debt-laden property sector weighing on investor sentiment.
US-listed Chinese stocks and mainland A-shares led the selloff in November, Goldman Sachs said, adding it was “partially offset by net buying in H-shares.”
Even so foreign capital outflows, including both retail and institution money, from mainland China A-shares via the northbound trading link slowed down considerably.
Outflows stood at 1.8 billion yuan ($252.2 million) in November, compared to over 30 billion yuan in October and September each.
- Reuters, with additional editing by Vishakha Saxena
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