China’s stock market fund outflows add to biggest capital flight since 2016: Goldman
- Foreign funds have taken US$5.1 billion out from China’s stock market this month, pacing the exits in the region: Goldman
- Some US$75 billion flowed out from China’s capital and current accounts in September, the most since end-2016, amid yuan’s slump
Foreign investors were net sellers of US$3.3 billion of A shares last week, bringing the leakage so far this month to US$5.1 billion or about half of the net outflows in the region, the US investment bank said in a report over the weekend. The CSI 300 Index tumbled 4.2 per cent last week, approaching the lowest level in 12 months.
The biggest stock pullbacks were focused on market leaders like liquor distillers Kweichow Moutai and Wuliangye Yibin, food-seasoning producer Haitian Flavouring, gold miner Zijin Mining, advertising company Focus Media Info, and Ping An Insurance (Group).
“With ‘higher for longer’ interest rates in the US and the need for more monetary policy easing in China, the pressure for capital outflows and [yuan] depreciation persists,” Goldman economists said in another report on Monday. “Policymakers appear to put more weight on confidence and stability in foreign-exchange management.”