GLOBAL investors have been shedding China’s blue-chip stocks in what’s been a record-selling streak, showing even the nation’s industry leaders are falling out of favour as a rout deepens.  

Foreign investors sold 6.2 billion yuan (S$1.17 billion) of Kweichow Moutai during Aug 7-18, making China’s largest liquor maker the most heavily sold stock via trading links with Hong Kong. It was followed by 4.7 billion yuan of selling each for leading renewables stock LONGi Green Energy Technology and major lender China Merchants Bank, according to the latest data on individual stocks available on Bloomberg.

Overseas funds have been fleeing the mainland market, offloading the equivalent of US$9.3 billion in a twelve-day run of withdrawals through Tuesday, the longest since Bloomberg began tracking the data in 2016. Their departure comes as a prolonged housing slump raises the risk of broader financial contagion, making the nation’s equity benchmark among the worst global performers this month with a 7 per cent loss.  

The CSI 300 Index is now trading near the lowest since November as optimism following the July Politburo meeting quickly evaporated. Foreigners had moved into the market en masse back then, only to leave again now in droves as economic data continue to disappoint and stimulus fails to impress.  

The ten most-sold stocks by foreigners in the latest rout were among the 50 largest ones on the CSI 300. Major distiller Wuliangye Yibin, Ping An Insurance Group of China, and electric vehicle maker BYD saw selling of at least 2.9 billion yuan each through Aug 18.

The selling streak is showing little sign of cooling. Overseas funds shed more than 6 billion yuan again as at mid-Wednesday. A top-performing Chinese macro hedge fund blamed global capital for sinking the country’s stocks, calling them a “bunch of aimless flies” that stir up market volatility. That said, foreign funds own less than 4 per cent of total A-shares outstanding, according to a report this month from China International Capital. BLOOMBERG

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