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US-listed Chinese stocks
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US$100 billion wiped out from US-listed China stocks’ market value in April as tensions mount

  • The Nasdaq Golden Dragon China Index ended lower for a sixth straight session on Tuesday, its longest streak of losses in more than a year
  • US-based long-only fund managers have been the dominant sellers of Chinese ADRs this month, according to Morgan Stanley

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The stocks of US-listed Chinese companies have taken a beating this month. Photo: Bloomberg
Bloomberg
US-listed Chinese stocks have lost over US$100 billion in market value in April as concerns over geopolitical tensions eclipse optimism about the Asian giant’s economy.
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American depositary receipts of internet giants from Alibaba Group Holding to JD.com slid on Tuesday and sent the Nasdaq Golden Dragon China Index lower for a sixth straight session, notching the benchmark’s longest streak of losses in more than a year. Following a plunge of over 10 per cent since the end of March, the gauge is heading towards its worst month since October.

As the initial euphoria over the Covid reopening faded, investors have quickly trimmed their bets on China’s stocks at a time when the country clashes with the US on issues from Taiwan to TikTok and semiconductor chips. President Joe Biden aims to sign an executive order in the coming weeks that will limit investment in key parts of the Asian nation’s economy by American businesses, people familiar with the internal deliberations have recently said.
ADRs of JD.com have slid in the Us this month. Photo: Reuters
ADRs of JD.com have slid in the Us this month. Photo: Reuters

US-based long-only fund managers have been the dominant sellers of Chinese ADRs this month, according to Morgan Stanley strategists led by Gilbert Wong. As a result, the gap between their holdings and the benchmarks that their funds have set against has only widened, Wong said.

Some investors have already given up their positive stance on Chinese stocks, even though a consumption rebound is leading a faster-than-expected recovery in economic activities.

Union Bancaire Privee cut Chinese stocks to neutral from overweight this week, citing geopolitical risks. Meantime, the Ontario Teachers’ Pension Plan on Tuesday said it’s winding down its Asia equity investment team in Hong Kong.

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It’s not just the stocks listed in New York that are seeing heavy losses.

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