Global Hedge Funds Aggressively Selling Chinese Stocks Amid Economic Concerns: Goldman Sachs

Global hedge funds are ramping up their selling of Chinese stocks as concerns over the country’s property sector and weak economic data continue to weigh on investor sentiment, according to a recent report by Goldman Sachs.

The report revealed that hedge funds have been aggressively offloading Chinese stocks, with A-shares leading the sell-off by comprising 60% of the total sales. This trend has been consistent over the past ten sessions, with clients divesting both their long and short positions.

Goldman Sachs noted that this recent wave of selling is the largest net selling of Chinese equities over a 10-day period since October 2022, marking one of the most significant moves in the past five years. As a major provider of lending and trading services to investors, the bank is able to closely monitor hedge funds’ investment trends.

The heightened selling pressure comes as global investors grow increasingly concerned about China’s economic outlook. Recent economic data has underscored the challenges facing the country’s economy, prompting Beijing to take steps to support growth.

In addition to economic concerns, recent events in the Chinese property market have added to investor unease. Reports of delays in bond payments by major property developer Country Garden and missed repayment obligations by Zhongrong International Trust Co have further fueled fears about the sector’s stability.

This wave of selling is not limited to hedge funds, as U.S.-based funds such as Coatue, D1 Capital, and Tiger Global have also reduced their exposure to Chinese stocks in the second quarter. The combination of economic uncertainty and geopolitical tensions has led many investors to reevaluate their positions in Chinese equities.

As the situation continues to evolve, market participants will be closely watching for any further developments that could impact investor sentiment towards Chinese stocks.