Investors dump Chinese stocks, bonds amid global recession fears

by | Aug 4, 2022 | World

The trade group report points to the sixth consecutive month of foreign outflows from China’s $20 trillion bond market.Foreign investors continued to cut holdings in Chinese bonds in July and dumped equities for the first time in four months, according to a report by the Institute of International Finance (IIF).
Emerging markets (EM) posted a fifth straight month of portfolio outflows, setting the longest such streak in records going back to 2005, as global recession risk, inflation and a strong dollar drew away cash, the report released on Wednesday showed.
Chinese debt witnessed outflows of about $3bn last month, while $6bn exited other EM, IIF estimated.
If confirmed by official data, it would be the sixth consecutive month of foreign outflows from China’s $20 trillion bond market.
During the same period, China’s stock market witnessed $3.5bn of foreign outflows, compared with marginal inflows of $2.5bn in other EM, the global financial services trade group added.
The benchmark CSI 300 Index dropped 7 percent, down every week in July, as domestic COVID-19 flare-ups, property woes and global recession risks weighed on the market.
“China’s A-shares saw a range-bound, generally weaker trend since July under both domestic and overseas influences,” China International Capital Corporation (CICC) said in a note.
Data showed the world’s second-largest economy slowed sharply in the second quarter, missing market expectations with only a 0.4 percent increas …

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