US-listed China stocks see US$100 billion wipe-out in jittery month
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.
American depositary receipts (ADRs) of Internet giants from Alibaba Group Holding to JD.com are down Tuesday (Apr 25) and on track to send the Nasdaq Golden Dragon China Index lower for a sixth straight session, which would be 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 toward its worst month since October.
As the initial euphoria over the post-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.
US-based long-only fund managers have been the dominant sellers of Chinese ADRs this month, said 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.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
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.
In the meantime, the Ontario Teachers’ Pension Plan on Tuesday said it is winding down its Asia equity investment team in Hong Kong.
It is not just the stocks listed in New York that are seeing heavy losses.
The Hang Seng China Enterprises Index, a gauge tracking Chinese stocks in Hong Kong, ranks as the third-worst performer in the past three months among 92 stock benchmarks tracked by Bloomberg. The mainland CSI 300 Index just suffered its worst five-day run since October. BLOOMBERG
Share with us your feedback on BT's products and services
