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Foreign investors are unwinding a $33B bet in China equities as doubts grow that the government can fight flagging growth.
Foreign investment in China-listed stocks (NYSEARCA:FXI) (NASDAQ:MCHI) is down 87% to 30.7B renminbi ($4.35B) since peaking at 235B renminbi in August, the Financial Times reported.
“The confidence issue goes beyond real estate, although real estate is key,” Wang Qi, CIO for wealth management at UOB Kay Hian in Hong Kong, told the FT. “I’m referring to consumer confidence, business confidence and investor confidence – both from domestic and foreign investors.”
China has trailed broader global markets of late. Since the start of August, the Shanghai Composite (SHCOMP) is down more than 10%, while the S&P 500 (SP500) (SPY) (IVV) (VOO) is up more than 6%.
According to BofA, $152B has flowed into global equities this year, with $90.7B going into emerging markets and $72.9B of that going into China.
