Foreigners Can Soon Own More China Stocks. But No One Wants Them
By Livia Yap
May 12, 2019, 5:00 PM EDT
Updated on May 13, 2019, 3:48 AM EDT
Overseas investors can soon own more Chinese stocks -- the trouble is they don’t seem to want them.
Foreigners are dumping mainland-listed shares at a record pace, just as MSCI Inc. prepares to expand their weighting in its benchmark indexes. Already this month, 17.4 billion yuan ($2.6 billion) of A shares have been sold through trading links with Hong Kong, putting May well on track to surpass the 18 billion yuan outflow in April.
Chinese stocks remain some of the best performing in world this year, yet about $1 trillion has been wiped from the country’s equity markets in just three weeks as the trade dispute with the U.S. returned to center stage. Concern that Beijing may pare back stimulus plans also weighed: the Shanghai Composite Index has dropped 11% from an April peak.