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The change, first hinted at in April, comes as foreign funds have steadily withdrawn from the market, taking the year-to-date tally to negative as of Friday.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 domestic unit of the Chinese-owned, Dutch-headquartered chipmaker Nexperia BV will soon be able to produce semiconductors locally within China, according to two company sources. Nexperia is at the center of a global tug-of-war over critical semiconductor technology, with a Dutch court in February ordering a probe into alleged mismanagement at the company. The geopolitical tussle has disrupted supply chains, with some carmakers reportedly forced to cut production due to chip shortages. Local production would allow Nexperia’s domestic arm, Nexperia Semiconductors (China) Ltd (安世半導體中國), to bypass restrictions in place since October on the supply of silicon wafers — etched with tiny components to
Taiwan is open to joining a global liquefied natural gas (LNG) program if one is created, but on the condition that countries provide delivery even in a scenario where there is a conflict with China, an energy department official said yesterday. While Taiwan’s priority is to have enough LNG at home, the nation is open to exploring potential strategic reserves in other countries such as Japan or South Korea, Energy Administration Deputy Director-General Chen Chung-hsien (陳崇憲) said. While the LNG market does not have a global reserve for emergencies like that of oil, the concept has been raised a few times —
AI-FUELED DEMAND: The company has been benefiting from the skyrocketing prices for DRAM chips amid the AI frenzy, especially its core product — DDR4 DRAM chips DRAM chipmaker Nanya Technology Corp (南亞科技) yesterday reported that its revenue for the first quarter surged 582.91 percent to NT$49.09 billion (US$1.54 billion) from NT$7.19 billion a year earlier, as the supply crunch caused chip price spikes. Last quarter’s figure is the highest on record. On a quarterly basis, revenue jumped 63.14 percent from NT$30.09 billion, the company said. In January, Nanya Technology expected global DRAM supply scarcity to continue through the first half of 2028, thanks to strong demand for artificial intelligence (AI) applications. Market researcher TrendForce Corp (集邦科技) forecast prices of standard DRAM chips would rise between 58 percent and 63
HIGHER PRICES: Given rising energy costs, CPC raised natural gas prices for generators by 41.58%, which Taipower said would raise its power generation costs by NT$10 billion State-run CPC Corp, Taiwan (CPC, 台灣中油) has activated its fourth naphtha cracker to boost ethylene supply, aiming to ease concerns over plastic material shortages amid tensions in the Middle East, the Ministry of Economic Affairs said yesterday. The move is expected to add 19,000 tonnes of supply this month and 30,000 tonnes next month, Deputy Minister of Economic Affairs Ho Chin-tsang (何晉滄) said at a meeting of the legislature’s Economics Committee in Taipei. CPC on Tuesday held talks with major polyethylene producers, including Formosa Plastics Corp (台塑), Asia Polymer Corp (亞聚) and USI Corp (台聚), and pledged to supply ethylene feedstock
RSS