Foreign investors accelerate selling of China equities in May, as net US$7.8 billion exits via stock connect
- Figures show 53.7 billion yuan (US$7.78 billion) worth of Chinese equities were sold during May via the stock connect, almost three times the outflow in April
Foreign investors accelerated their exit from mainland equities during May, reflecting the largest single month of selling through exchange links since December 2016, amid growing pessimism towards equities as trade tensions between China and the US continue to escalate.
A total of 53.7 billion yuan (US$7.78 billion) worth of Chinese equities were sold in May, almost three times the outflow in April, according to Bloomberg data. This marks the greatest monthly outflow by overseas investors since December 2016, when the Shenzhen-Hong Kong Stock Connect started. The Shanghai-Hong Kong Stock Connect was established in November 2014.
The stock connects offers foreign investors a pathway to China’s equity markets via Hong Kong.
Overseas investors started to pull funds out of Chinese equities in April, reflecting the first net outflow of funds since October last year after the US imposed tariffs on US$200 billion in Chinese products, and Beijing responded by targeting US$60 billion in US goods.
April figures show a net 18 billion yuan worth of outflows from mainland equities via the stock connects. Outflows accelerated in May as the trade war escalated and hopes of an impending deal between the world’s two largest economies faded.