China - Market Strategy 05 (Jan 23 - Jun 24)

[winston]

G Sachs Notes Massive Buying of CN Stocks by Hedge Funds on Tue, Fastest Pace in 9 Mths

Goldman Sachs reported that its hedge fund clients on Tuesday (25 July) made net purchases of Chinese stocks at the fastest pace in nine months, driven by the Chinese government's recent economic stimulus policies.

HSI surged more than 700 points on the day, while the three major A-share indices closed up between 2.1% and 2.5% for the day.

Goldman noted that hedge funds bought and shorted Chinese stocks at a ratio of 3.5 to 1 on Tuesday, with buying of A-shares denominated in RMB dominating, followed by Hong Kong-listed Chinese stocks. The amount of ADRs bought was relatively small.

Among the 11 sectors tracked by Goldman, hedge funds made net purchases in 9 sectors, including consumer discretionary, consumer staples, financials, raw materials and industrials, while only healthcare and utilities did not record a net purchase.

Source: AAStocks Financial News

http://www.aastocks.com/en/stocks/news/ ... -news/AAFN

[winston]

Foreigners Flock to China Stocks as Sentiment Turns Bullish

Overseas funds have added a net 49 billion yuan ($6.9 billion) worth of mainland stocks via trading links with Hong Kong in the past five sessions,

The buying spree has taken the year-to-date net purchase to a new high of 230 billion yuan after a lack of investor conviction kept the tally stagnant for months.

The monthly buying of 47 billion yuan in July was the largest since January’s record 141 billion yuan.

Source: Bloomberg

[winston]

China Rally Is Just an Opportunity to Sell for Many Global Funds

by Henry Ren

Source: Bloomberg

https://finance.yahoo.com/news/china-ra ... 03075.html

[behappyalways]

Chinese Government Asks Brokers How To Boost Stock Prices
https://www.zerohedge.com/markets/chine ... ock-prices

[winston]

China Is Losing Out as Global Funds Chase Returns in Japan Stocks

by John Cheng and Winnie Hsu

Japan is leaving China behind as Asia’s two largest stock markets compete for investor capital, with the latter’s prospects clouded by long-running concerns about economic growth and geopolitical tensions with the West.

Foreign buying of Japanese equities has exceeded that of Chinese peers for the first time since 2017.

Long-only managers continued to sell stocks in China and Hong Kong on a net basis in July despite a sharp rally, while buying shares in Japan.

Source: Bloomberg

https://finance.yahoo.com/news/china-lo ... 00197.html

[behappyalways]

"The minimum ratio of funds that brokerages must set aside in their cash settlement accounts will be cut to 13% from 16% starting October...Industry sources said 30-40B yuan (US$4-5 billion) of funds may be unleashed into the market as a result"
https://twitter.com/ChinaBeigeBook/stat ... 5733033984

[winston]

Thousands of tiny hedge funds face closure in China shakeup

China’s 6 trillion yuan (RM3.81 trillion) hedge fund industry is bracing for a historic shakeup that will likely cause thousands of smaller managers to shut and impose stricter regulations on larger peers that have become a growing force in local markets.

Impose a 10 million yuan asset minimum on Chinese hedge funds, a threshold that is expected to force the liquidation of more than a third of the existing products.

The rules will also cap leverage levels and the size of investments hedge funds can make in single securities.

Almost 35,000 products, or about 37% of all existing hedge funds, were smaller than even half of the 10 million yuan minimum asset requirement.

Unlike in the US where the largest 500 hedge funds manage about 57% of industry assets, the market in China is more concentrated, with the top 500 firms holding about 84% of assets,

Source: Bloomberg

https://theedgemalaysia.com/node/678269

[winston]

Chinese stock outlook hammered by property crisis, US investment curbs and economic data amid stimulus ‘lip service’

The CSI 300 Index of the biggest onshore companies slid 3.4 per cent last week as investors sold US$3.6 billion in mainland stocks

‘The China market is in a difficult spot,’ says a Hong Kong-based fund manager at Matthews Asia. ‘I can only say the downside is limited.’

by Jiaxing Li

Triple whammy of a deepening property crisis, heightened geopolitical headwinds and a dim economic outlook.

Source: SCMP

https://www.scmp.com/business/markets/a ... 73a33bd510

[winston]

China Hedge Funds in Crisis After Losses, US Investor Retreat

by Bei Hu and Nishant Kumar

The number of active China-focused hedge funds has slipped for the first time since at least 2012, with only five new funds launched this year as of June. Another 18 funds were liquidated.

Beijing’s crackdowns on private companies in industries including after-school tutoring and e-commerce, along with growing geopolitical tensions with the US, have led to weak returns since then and sapped global investors’ appetite for China assets.

More than two-thirds of China-focused hedge funds lost money in 2022, while 36% were down a fifth or more. In the first half of this year, 62% of China funds failed to make money.

Source: Bloomberg

https://finance.yahoo.com/news/china-he ... 00058.html

[winston]

Ray Dalio’s Bridgewater, world’s biggest hedge fund liquidates a third of its China stock holdings but loads up on consumer plays

Connecticut-based Bridgewater Associates’ retreat is biggest since it sold shares in major China tech firms including Alibaba and NetEase in last year’s second quarter

It sold its entire stake in 13 US-listed Chinese companies, including online brokerage Futu Holdings, delivery platform Dada Nexus and online forum Zhihu

by Jiaxing Li

Source: SCMP

https://www.scmp.com/business/markets/a ... e=homepage