‘Why is China down again?’ Bewildered Hong Kong-based funds ask BofA Securities to explain stock losses
- The MSCI China Index tracking more than 700 stocks listed at home and abroad has slid 9 per cent this month, the worst start to a year since 2016
- Some veteran China investors reckon that China’s economic fundamentals are not as bad as stock prices suggest, BofA Securities’ Winnie Wu says
Fund managers in Hong Kong appear to be baffled by the slump in Chinese stocks after the market’s worst start to a year since 2016. Some bearish investors wished they were wrong about the gloom.
“We have met many investors in Hong Kong in the past weeks, and sentiment is poor,” Winnie Wu, head of China equity strategy at Bank of America Securities (BofA Securities), said in a report on Thursday.
“Almost every day this year, people have asked ‘why is China down again?’”
The reasons are manifold, ranging from a hawkish US monetary policy, geopolitical tensions, China’s merciless anti-corruption crackdown and policy disappointment to speculation about fund liquidation.
The MSCI China Index tracking more than 700 stocks listed at home and abroad has slid 9 per cent so far this month for the worst start to a year since 2016 to compound a three-year long losing streak.
The gauge has tumbled more than 60 per cent from an all-time high in February 2021, wiping out US$1.85 trillion of market cap from index members.