China might see its first yearly outflow from equities this year — but if and when it happens, investors would not know from exchange data.
That is because the country’s stock exchanges would stop releasing daily data on overseas fund flows starting today, depriving investors of a key sentiment indicator to track the US$8.3 trillion market.
The change, first hinted at in April, comes as foreign funds have steadily withdrawn from the market, taking the year-to-date tally to negative as of Friday.
Photo: Raul Ariano, Bloomberg
Analysts saw the move as another effort by authorities to prop up the market, hoping to reduce volatility induced by high-frequency data and turn investor focus to longer-term indicators.
“Beijing stopped the release, because the data hasn’t been looking good, and it’s volatile,” abrdn Asia Ltd investment director Ng Xin-yao (黃新耀) said.
“They probably don’t want the data to amplify capital outflows,” but “it doesn’t solve the root of the problem,” he added.
If the selling persists, China might see the first annual outflow from its stock market since 2016, when Bloomberg began tracking purchases through the trading links with Hong Kong.
With the absence of data, investors would have to rely on the Chinese central bank’s quarterly reports on financial assets held by overseas entities for an indication.
Those are subject to a lag and measure the value of outstanding equities held by foreigners through broader channels, rather than flows.
China’s benchmark CSI 300 Index has fallen more than 9 percent since a May peak, as a hoped-for earnings recovery failed to materialize and policy support fell short.
Stocks have flopped even with massive purchases by state funds, with estimates that they plowed the equivalent of US$66 billion into exchange-traded funds this year.
There is little sign that an economic recovery is afoot. The latest data showed a surprise slowdown in fixed-asset investment and a softening in industrial production.
Global funds might find more reasons to shun China in the run-up to the US presidential elections, as anti-Beijing rhetoric and unfavorable trade measures are expected to gather pace.
“Market sentiment stagnates as more disappointing macro prints are released and policy easing remains reactive,” Morgan Stanley analysts including Laura Wang (王瀅) wrote in a note on Thursday. “We expect market volatility to remain relatively high and advise positioning more defensively in the near term.”
The latest decision followed an end to disclosing data on intraday flows through the trading links in May.
Last year, China asked fund houses to stop displaying real-time estimates of mutual fund products’ net value.
The lack of data transparency has been a constant issue in China, where the publication of some statistics has ceased without explanation — particularly in cases where the information has not been favorable for the economy or markets.
After the new rule takes effect, the only daily data published by the exchanges would be the total turnover and the number of trades made in stocks and exchange-traded funds via the Hong Kong links, as well as the turnover of the 10 most active securities. The total number of shares held through the links would be disclosed on a quarterly basis.
Real-time trading data for flows from China to Hong Kong, referred to as the southbound data, would still be available after this month’s deadline.
The government yesterday approved applications by Alphabet Inc’s Google to invest NT$27.08 billion (US$859.98 million) in Taiwan, the Ministry of Economic Affairs said in a statement. The Department of Investment Review approved two investments proposed by Google, with much of the funds to be used for data processing and electronic information supply services, as well as inventory procurement businesses in the semiconductor field, the ministry said. It marks the second consecutive year that Google has applied to increase its investment in Taiwan. Google plans to infuse NT$25.34 billion into Charter Investments Ltd (特許投資顧問) through its Singapore-based subsidiary Fructan Holdings Singapore Pte Ltd, and
Micron Technology Inc is a driving force pushing the US Congress to pass legislation that would put new export restrictions on equipment its Chinese competitors use to make their chips, according to people familiar with the matter. A US House of Representatives panel yesterday was to vote on the “MATCH Act,” a bill designed to close gaps in restrictions on chipmaking equipment. It would also pressure foreign companies that sell equipment to Chinese chipmaking facilities to align with export curbs on US companies like Lam Research Corp and Applied Materials Inc. The bill targets facilities operated by China’s ChangXin Memory Technologies Inc
SECOND-RATE: Models distilled from US products do not perform the same as the original and undo measures that ensure the systems are neutral, the US’ cable said The US Department of State has ordered a global push to bring attention to what it said are widespread efforts by Chinese companies, including artificial intelligence (AI) start-up DeepSeek (深度求索), to steal intellectual property from US AI labs, according to a diplomatic cable. The cable, dated Friday and sent to diplomatic and consular posts around the world, instructs diplomatic staff to speak to their foreign counterparts about “concerns over adversaries’ extraction and distillation of US AI models.” Distillation is the process of training smaller AI models using output from larger, more expensive ones to lower the costs of training a powerful new
Singapore-based ride-hailing and delivery giant Grab Holdings’ planned acquisition of Foodpanda’s Taiwan operations has yet to enter the formal review stage, as regulators await supplementary documents, the Fair Trade Commission (FTC) said yesterday. Acting FTC Chairman Chen Chih-min (陳志民) told the legislature’s Economics Committee that although Grab submitted its application on March 27, the case has not been officially accepted because required materials remain incomplete. Once the filing is finalized, the FTC would launch a formal probe into the deal, focusing on issues such as cross-shareholding and potential restrictions on market competition, Chen told lawmakers. Grab last month announced that it would acquire
RSS