The volatility in foreign investor appetite for Chinese stocks continues according to the latest report of Asia Pacific fund flows from the ANZ Bank.
Citing data from EPFR Global, ANZ strategist, Khoon Goh said that after buying US$17 billion (£10.8 billion) of Chinese stocks in the previous two weeks, US$12.47 billion (£7.9 billion) alone in the week before, offshore investors sold Chinese stocks aggressively in the week ending July 15 with $US5.6 billion (£8.7 billion) in sales.
Shanghai stocks are up again today after a mid-week hiccup in Beijing’s stock market rescue efforts. But the volatility seen in the market and now in fund flows, is leading to potentially dangerous instability.
In what looks like a paradigm shift in foreign investor assessment of risk in Chinese stocks ANZ’s Goh said (emphasis ours):
The volatility in e Chinese equity market is certainly resulting in big moves in investor flows. In the past few months, flows in and out of China equity funds have been between -2% and 4% of AUM, compared to the normal range of -1% to 1% previously.
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