Our websites use cookies to offer you a better browsing experience by enabling, optimising, and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy and our privacy policy.
May recorded a net outflow totalling 53.7 Billion RMB (7.78 Billion USD) from Northbound trading, almost three times as much the 18.0 Billion outflow in April (which was already a 28-month high as of last month)
In the month of 18 trading days, only 2 days closed with net buying which amounted to 11% only of the tradeable days
The accelerating outflow is a direct consequence of the escalating trade tensions which was set off by the new round of tariff on US$200 billion of Chinese goods imposed by the US since 12-May-2019.
US Commerce Department has also put 5G developer Huawei on an “Entity List” based on national security reasons and restricted US chipmakers in the names of Qualcomm and Xilinx from supplying component to the Chinese Telcom equipment producer.
Surveillance technology giants like Hikvision Digital and Dahua Technology have also been impacted in a similar way as the ban on US component supply rippled across the 5G space.
Many speculated China will adopt a series of retaliatory measures including restricting rare earth exports to the US, similar tariffs on further American imports and “cheaper” fixing for offshore Yuan against the Dollar
However, in contrast to the recent pessimism over the US-China trade front, some still believe the China A-shares’ growing inclusion in MSCI indexes will support valuation over the longer term and thus inflow into the China stocks will return.
The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.