Yuan devaluation sends China’s private wealth offshore
China’s recent 2% devaluation of the yuan has underscored to investors the importance of offshore diversification, according to the Shanghai Daily, citing agency reports. High net worth individuals are now trying to move cash out of the country.
Private bankers said last month’s stock market turmoil had already pushed HNWI money into overseas investments.
“Analysts at JPMorgan said that about $235bn of “hot money” left the country between the third quarter of last year and the end of the second quarter of this year.”
Shanghai Daily, August 14
Hedge funds whacked in China
China-focused hedge funds recorded the worst monthly loss since January 2008, losing 8.33% in July, yet they are still up 10.8% year-to-date.
Asia ex-Japan mandated hedge funds returned 9.87% year-to-date, outperforming the MSCI AC Asia ex Japan Index by 8.74%.
China Money Network, August 13
China invests 200bn yuan in five bailout funds
China Securities Finance, the entity under the CSRC in charge of the stock market bailout, launched five funds managed by outside fund firms and injected 40bn yuan ($6.2bn) into them.
The total amount of bailout money is estimated at 886bn yuan ($138bn), according to the PBOC monthly report for July.
21st Century Business Herald, August 12
Harvest sacks Deutsche consultancy pact
China-based asset manager Harvest has terminated its QDII fund investment-consulting contract with Deutsche Investment Management Americas.
Harvest is not the only mainland manager who has dropped foreign consulting arrangements for QDII funds. China AMC, CSOP and Changsheng had previously done so because they can now manage in overseas markets without support from foreign consultants.
Now only 18 out of 118 QDII funds maintain overseas consultants, the smallest number since the first QDII fund was launched eight years ago.
In the year to August 6, QDII funds with a consultant yielded an average of -1.79%, while those without a consultant returned -1.49%.
China Fund, August 10
Senior CSRC official probed for corruption
Li Liang, former head of the China Securities Regulatory Commission’s investor protection bureau, was dismissed from the commission before his trial on charges of corruption. Li was formerly the head of listing approval for companies on China’s Nasdaq-like ChiNext Board on the Shenzhen Stock Exchange.
www.csrc.gov.cn, August 7
300 active equity funds have almost no holdings
More than 300 active equity funds with a combined AUM of 1trn yuan ($156.3bn) have barely any holdings. These funds bailed out of their stock positions during the period of the market crash that began in late June.
Shanghai Securities Times, August 7