HONG KONG: According to a statement from Morgan Stanley that cited data from bank movement monitor EPFR, international finance managers sold China equities strongly in October despite additional actions taken by authorities to boost the country’s second-largest economy.
According to the report, which was seen by Reuters, online flow from active long-only funds from China and Hong Kong stocks totaled US$ 3.1 billion last month, exceeding US$ 3 billion for the third consecutive month.
According to Morgan Stanley researchers led by Gilbert Wong,” the flows( are) primarily due to regional funds’ balancing out of China, in which European-dominant money led.”
Morgan Stanley claims that since 2018, frequent outflows have led to international long-only managers being their most skinny in China.
According to the report, withdrawals from US-domestic funds increased in October, and Western funds released about half of their assets that had accumulated since late 2020.
Investors continue to be skeptical of China’s economic recovery, especially in light of the unexpected contraction of production action in October.
Last month, the MSCI China standard dropped by 4.3 percent, while the CSI 300 fell by 3.2 %. JD.com, Xiaomi, and China Construction Bank are just a few of the companies that were sold off. However, wagers were added to plan company AIA as well as online juggernauts Alibaba and Baidu.
Separately, according to Goldman Sachs prime services data, hedge fund net allocation to China increased from 8.1 percent at the end of September to 8.5 % as of end-October.