Global Investors Flee Chinese Stocks at Fastest Pace Since 2015

Epoch Times:

WASHINGTON—The recent U.S.–China trade dispute has prompted the biggest capital outflow from Chinese equities in nearly four years. More than $6 billion of capital has fled China’s stock market since May 6, according to data compiled by the Institute of International Finance (IIF).

Tensions escalated between the United States and China when Trump wrote in a tweet on May 5 that he would increase tariffs on $200 billion Chinese goods to 25 percent from 10 percent. Trump accused Beijing of backtracking on its commitment to deliver structural reforms.

The dispute revealed the vulnerability of China’s stock market, with the Shanghai Stock Exchange Composite Index falling nearly 6 percent on May 6, the day after Trump’s tweet. The stocks haven’t recovered since then.

The total outflow from Chinese stocks by nonresidents since tensions escalated reached $6.2 billion, according to IIF, which has tracked capital movement in emerging market equities on a daily basis since 2010.

Trump’s tweet and the intensification of the trade conflict came as a big surprise to investors, according to Jonathan Fortun, an economist at IIF. read more

7 Comments on Global Investors Flee Chinese Stocks at Fastest Pace Since 2015

  1. There will be a deal by the end of May, in time for the arriving cargo ships to offload without paying the increased tariffs. Or else those cargo ships will sit, somewhere, until a deal is struck. MAGA, indeed!

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  2. Honestly. I have no idea why you would invest good money in a communist dictatorship? That’s stupid on stilts. No thank you.

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  3. “…revealed the vulnerability of China’s stock market…”

    EVERY stock market has foundations of moon beams and cob webs. Billions disappear at the slightest “tension” or “fears” in investors.

    And the institutional trading houses wouldn’t have it any other way. They have fought every single measure that would impose any measure of sanity.

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  4. This has put the wind up me. One of my pet peeves as it were. We allow ‘speculators’ in our commodities markets. I’ll speak to one I know a bit about, oil. Light sweet crude, on a tanker headed to America.

    A speculator (which only requires credit or leverage) can buy that cargo. They don’t have a contract with a receiving terminal to handle that 2 million barrels of oil. They don’t have a contract with a pipeline company to transport it to a refinery. They don’t have refinery capacity booked to turn it into fuel, and likewise with another pipeline to transport it to market.

    But they can get between the people that do and that oil. And they do. Every single day. Which raises the price.

    This can be fixed very easily. You wanna’ trade in oil or pork bellies, or Canadian 2X4’s? You show you do have that near end handling capacity under contract for the commodity you’re speculating on.

    That would remove about 80% of the volatility in that segment of the market.

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  5. I’ve heard Amash Chinese investment losses have something to do with his buthurt over Trump.
    Tough shit, counselor – should have taken the financial management course.

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