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全球资金“扫货”中国资产!高盛:中国风险情绪可能会在大选之后转为看涨

Global funds are "sweeping up" Chinese assets! Goldman Sachs: Chinese risk sentiment may turn bullish after the election.

Securities Times ·  Nov 5 09:56

Global funds are flocking to Chinese assets.

Goldman Sachs' latest global capital flow report shows that in the four weeks ending October 30, a total of $63.628 billion flowed into the global stock market. Of this, US stocks received a net inflow of $37.228 billion, and A-share market received a net inflow of $24.385 billion (approximately RMB 170 billion).

In a previous report, Goldman Sachs strategists stated that emerging market funds have been increasing their exposure to China and North Asia over the past month. Once the US election is over and the uncertainty in the market clears, this exposure may rapidly increase.

According to the latest data from Goldman Sachs, the Indian stock market has become one of the 'hardest-hit areas' for global fund selling. As a result, the Indian stock market continues to decline. On November 4, the Indian benchmark stock index Nifty 50 index plummeted by more than 2% during intraday trading, marking the largest intraday drop since October 3. According to JPMorgan's research report, foreign institutional investors (FIIs) witnessed the highest single-month net outflow in history in October, with a net outflow from the Indian stock market reaching $10.4 billion.

Explosive buy of 170 billion

Goldman Sachs' latest global capital flow report shows that in the four weeks ending October 30, a total of $63.628 billion flowed into the global stock market. Of this, US stocks received a net inflow of $37.228 billion, A-share market received a net inflow of $24.385 billion (equivalent to about RMB 170 billion), while Japanese stocks and the Indian stock market saw net outflows of $6.063 billion and $0.284 billion, respectively.

In a prior report, Goldman Sachs strategists predicted that Chinese stocks will rise in the 2 to 3 months following the US Presidential election. However, they also cautioned that if former President Trump were to win, the market could have a 'knee-jerk reaction.'

The analysts at the bank wrote in the report: 'During the past two weeks of the re-pricing of Trump risk, Chinese stocks did not experience significant selling, indicating resilience. We believe that the risk sentiment towards China may turn bullish after the election.'

Goldman Sachs analysts stated that the valuation of Chinese stocks is still below historical average levels, and profits may improve, while global investors' positions remain relatively low.

Goldman Sachs also pointed out that emerging market funds have been increasing their exposure to China and North Asia over the past month. Once the uncertainty lingering in the market is resolved after the election, this exposure may rapidly increase.

Looking ahead to the future of A shares, Citic Securities stated that the market is currently poised at the starting line of an annual marathon rally. Clarity in policy signals, external signals, and price signals will act as the starting gun. On the one hand, from the perspective of the three major signals, in terms of policy signals, November is a crucial window for decisive measures and policy adjustments; policies will not be absent and changes will not be abrupt. Regarding external signals, the outcome of the U.S. election will not alter the upward trend of A shares, but will significantly impact the market structure; in terms of price signals, there has been a clear improvement in domestic economic quantity indicators, and we still need to wait for the turning point in price signals. On the other hand, in terms of market features, the current thematic stock market and the sharp increase in ETF size have accelerated the process of active institutional shareholders' clearance. Major institutional investors will have a significant margin to increase positions in the future, and quality stocks will present an excellent buying opportunity once price signals are clear.

Foreign capital is selling Indian stocks.

According to the latest data disclosed by Goldman Sachs, the Indian stock market has become one of the "hard-hit areas" for global capital outflows.

As a result, the Indian stock market continues to decline. On November 4, the benchmark Nifty 50 index in India fell by more than 2% intraday, marking the largest intraday decline since October 3.

Since October this year, foreign investment enthusiasm in India has dropped to freezing point. Last Friday, the Nifty 50 index closed at 24,205 points, with a monthly cumulative decline of 6.2%, making it one of the most severe downturns since 2020; the MSCI India index fell by 7.7%.

According to JPMorgan's research report, foreign institutional investors (FII) saw the highest single-month net outflow in history, reaching $10.4 billion, a sharp contrast to the $5.9 billion net inflow in September.

Behind the crazy selling by foreign institutions is the alarm bells ringing from various key macroeconomic indicators in India.

Data from August shows that India's GDP grew 6.7% in the three months ending June, the slowest growth rate in five quarters. Nomura Securities economists said last month that India's growth prospects seem less optimistic.

Currently, the Reserve Bank of India still maintains the benchmark interest rate at a relatively high level, further exacerbating market concerns about future trends.

Analysts point out that the main reasons for the exodus of foreign institutional investors are the weak profitability of Indian companies and concerns about the overvaluation of the Indian stock market. In particular, some international funds are gradually shifting towards China and other emerging market countries, leading to a significant outflow of funds from the Indian market.

At the same time, the Indian market also faces multiple internal and external economic challenges, including inflationary pressures, slowing growth, which further weaken investor confidence.

Recently, Goldman Sachs also downgraded its rating on the Indian stock market from 'buy' to 'neutral', warning that the overall valuation has reached 24 times the expected earnings, at historical highs, which is the most common concern for investors. Goldman Sachs predicts that with the economic slowdown affecting corporate profitability, the Indian stock market may experience fluctuations in the next 3 to 6 months.

Mumbai's Marcellus Investment Managers Chief Investment Officer Saurabh Mukherjea stated: 'This is a rather typical cyclical economic downturn in India.'

While foreign funds are fleeing, domestic institutional investors (DII) in India are increasing positions against the trend, maintaining a net buy for 14 consecutive months. The inflow in October set a record of $12.8 billion, presenting a situation of 'domestic buying, foreign selling'.

Editor/Somer

The translation is provided by third-party software.


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