Amassing Chinese Stocks Proved the Right Call for G20-Savvy Investors
(Bloomberg) -- They saw it coming. In the runup to Saturday's announcement of a thaw in relations between the U.S. and China, investors put money into U.S. exchange-traded funds buying Chinese equities for the first time in nine weeks.
ETF inflows into Chinese and Hong Kong stocks totaled $157 million in the five days through June 28, compared with outflows of $233 million the week before, according to data compiled by Bloomberg. A fund that buys A shares listed in the Shenzhen and Shanghai stock exchanges, which are denominated in yuan, received the single-largest amount.
Total inflows into U.S.-listed ETFs that invest across developing nations as well as those that target specific countries totaled $311 million in the week.
- Stock ETFs expanded by $391 million.
- Bond funds fell by $81 million.
- Total assets rose to $273 billion from $272 billion.
The gains may continue for a second week. Global markets rallied Monday after President Donald Trump held off on further tariff increases and made overtures to China toward an eventual trade deal. The Shanghai Composite Index advanced to the highest level since April and the yuan reached its highest close in seven weeks.
PBOC's Ma Jun Says China Can Grow Above 6% Without New Easing
It's not just China that is benefiting. Taiwan-focused funds received $28 million last week, compared with a loss of $58 million in the previous week. India turned $40 million of outflows into $50 million of inflows. Vietnam, which is attracting investment from Chinese manufacturers looking to skirt higher U.S. tariffs, saw its equity flows more than double to almost $18 million.
The best performer in emerging Europe, Middle East and Africa was Greece amid expectations for a change of government after the July 7 elections. The opposition New Democracy is expected by many investors to take a more market-friendly position than the ruling Syriza party and is leading in opinion polls.
Regional Summary
| Region | Flow Week | Flow % Change | Equity Flow | Bond Flow | Total Assets (USD Bln) |
|---|---|---|---|---|---|
| Total EM | 310.5 | 8.5% | 391.1 | -80.5 | 272.6 |
| Americas | -10.9 | -105.4% | 14.9 | -25.8 | 45.0 |
| Asia Pac | 282.9 | 254.0% | 298.2 | -15.4 | 181.2 |
| EMEA | 38.5 | -85.6% | 77.9 | -39.4 | 46.5 |
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Americas
| Country | Flow Week | Flow % Change | Equity Flow | Bond Flow | Total Assets |
|---|---|---|---|---|---|
| Chile | 7.6 | -66.1% | 9.3 | -1.7 | 3,175.0 |
| Mexico | 2.4 | -95.6% | 5.6 | -3.2 | 7,921.4 |
| Brazil | 2.0 | 130.6% | 4.1 | -2.1 | 26,466.4 |
| Belize | 0.0 | 0.7% | 0.0 | 0.0 | 0.3 |
| Bolivia | -0.2 | -115.0% | 0.0 | -0.2 | 32.8 |
| Trinidad & Tobago | -0.5 | -120.9% | 0.0 | -0.5 | 118.9 |
| Paraguay | -0.5 | -119.2% | 0.0 | -0.5 | 129.8 |
| Venezuela | -0.8 | -116.0% | 0.0 | -0.8 | 151.4 |
| Jamaica | -0.9 | -115.9% | 0.0 | -0.9 | 166.2 |
| Costa Rica | -0.9 | -118.6% | 0.0 | -0.9 | 187.9 |
| Uruguay | -2.1 | -112.6% | 0.0 | -2.1 | 611.1 |
| Panama | -2.1 | -116.6% | 0.0 | -2.1 | 442.7 |
| Colombia | -2.7 | -111.7% | 0.0 | -2.7 | 1,889.0 |
| Ecuador | -3.1 | -116.8% | 0.0 | -3.1 | 588.3 |
| Argentina | -4.0 | -119.0% | -1.8 | -2.2 | 1,378.2 |
| Peru | -5.1 | -126.4% | -2.3 | -2.7 | 1,699.2 |
Asia Pacific
| Country | Flow Week | Flow % Change | Equity Flow | Bond Flow | Total Assets |
|---|---|---|---|---|---|
| China/Hong Kong | 155.7 | 170.0% | 157.2 | -1.5 | 80,518.8 |
| India | 50.1 | 230.5% | 50.3 | -0.2 | 28,254.1 |
| Taiwan | 28.1 | 148.5% | 28.1 | 0.0 | 27,597.1 |
| Vietnam | 17.5 | 129.8% | 17.7 | -0.2 | 578.9 |
| Thailand | 12.1 | -6.5% | 11.4 | 0.7 | 8,013.1 |
| Indonesia | 10.2 | -64.6% | 13.6 | -3.4 | 6,450.9 |
| Philippines | 8.8 | -51.9% | 12.1 | -3.3 | 3,601.9 |
| Malaysia | 4.0 | 382.6% | 4.8 | -0.8 | 6,070.6 |
| South Korea | 2.6 | -91.0% | 2.4 | 0.2 | 18,507.4 |
| Bangladesh | 0.0 | -100.0% | 0.0 | 0.0 | 34.8 |
| Mongolia | -0.5 | -120.0% | 0.0 | -0.5 | 118.5 |
| Pakistan | -0.6 | -108.6% | 0.6 | -1.2 | 432.0 |
| Sri Lanka | -2.2 | -116.7% | 0.0 | -2.2 | 442.8 |
| Kazakhstan | -3.0 | -117.5% | 0.0 | -3.0 | 563.4 |
Europe, Middle East & Africa
| Country | Flow Week | Flow % Change | Equity Flow | Bond Flow | Total Assets |
|---|---|---|---|---|---|
| Greece | 35.2 | 1,481.7% | 35.2 | 0.0 | 1,095.4 |
| Russia | 13.9 | 285.5% | 16.7 | -2.8 | 11,115.6 |
| South Africa | 13.3 | 0.3% | 15.5 | -2.2 | 12,771.2 |
| Poland | 11.6 | -48.1% | 13.1 | -1.4 | 2,422.3 |
| Saudi Arabia | 6.6 | -83.5% | 8.6 | -1.9 | 3,655.5 |
| Czech Republic | 1.1 | -46.0% | 0.8 | 0.3 | 568.8 |
| Mauritius | 0.0 | 56.3% | 0.0 | 0.0 | 8.0 |
| Mozambique | 0.0 | 0.7% | 0.0 | 0.0 | 0.5 |
| Kuwait | 0.0 | -103.7% | 0.4 | -0.4 | 789.3 |
| Slovenia | -0.2 | -125.6% | 0.0 | -0.2 | 42.4 |
| Tunisia | -0.2 | -116.6% | 0.0 | -0.2 | 31.6 |
| Gabon | -0.3 | -115.7% | 0.0 | -0.3 | 49.2 |
| Zambia | -0.3 | -116.1% | 0.0 | -0.3 | 52.8 |
| Slovakia | -0.3 | -118.1% | 0.0 | -0.3 | 50.4 |
| Lithuania | -0.3 | -118.1% | 0.0 | -0.3 | 51.9 |
| Serbia | -0.3 | -115.8% | 0.0 | -0.3 | 63.5 |
| Senegal | -0.4 | -115.8% | 0.0 | -0.4 | 68.2 |
| Morocco | -0.4 | -116.9% | -0.2 | -0.2 | 120.8 |
| U.A.E. | -0.4 | -106.3% | 0.9 | -1.3 | 1,890.6 |
| Iraq | -0.7 | -116.4% | 0.0 | -0.7 | 120.6 |
| Ivory Coast | -0.7 | -116.1% | 0.0 | -0.7 | 131.4 |
| Jordan | -0.9 | -118.5% | 0.0 | -0.9 | 197.8 |
| Ghana | -1.0 | -115.4% | 0.0 | -1.0 | 188.5 |
| Croatia | -1.0 | -117.6% | 0.0 | -1.0 | 224.0 |
| Hungary | -1.2 | -109.9% | 0.3 | -1.6 | 1,207.3 |
| Kenya | -1.4 | -118.3% | -0.1 | -1.3 | 308.0 |
| Romania | -1.5 | -111.6% | 0.0 | -1.5 | 692.3 |
| Bahrain | -1.5 | -115.5% | 0.0 | -1.5 | 412.7 |
| Nigeria | -1.5 | -111.8% | 0.6 | -2.1 | 490.5 |
| Lebanon | -1.5 | -115.8% | 0.0 | -1.5 | 329.1 |
| Oman | -2.6 | -116.3% | 0.0 | -2.6 | 513.2 |
| Ukraine | -2.9 | -116.8% | 0.0 | -2.9 | 566.2 |
| Egypt | -3.0 | -117.7% | 0.0 | -3.0 | 984.6 |
| Qatar | -3.8 | -136.5% | -1.8 | -2.0 | 2,571.1 |
| Turkey | -14.8 | -175.3% | -12.1 | -2.7 | 2,681.8 |
To contact the reporter on this story: Srinivasan Sivabalan in London at ssivabalan@bloomberg.net
To contact the editors responsible for this story: Rachel Evans at revans43@bloomberg.net, Philip Sanders
©2019 Bloomberg L.P.
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