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<Research>M Stanley: Active Long-only Funds Sell Less CN Stocks in Apr; TENCENT, MEITUAN, BYD Positions Increased
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Morgan Stanley released a China Quantitative Strategy report. MSCI China Index rose 6.6% in April, but EPFR data showed that active long-only funds were net sellers last month, selling a further US$2.3 billion of shares. Redemptions continued, but there were fewer cuts in Chinese stocks as fund managers sold fewer Chinese stocks, while further reducing their holdings in other markets. According to the broker's position and capital flow monitoring, foreign long-only funds were not the only driver of the recent strength in the China and Hong Kong equities markets. The broker believed hedge funds and quantitative funds are also major buyers. Active funds in the global, emerging markets and Asia ex-Japan sectors have continuously slowed the reduction of their Chinese equities holdings, with global equity funds being the most active in instead increasing their such holdings during April. At the industry level, new energy vehicles and consumer services were the most notable additions, while e-commerce and bank stocks faced more selling pressure. Overall, Morgan Stanley did not identify a significant role for foreign long-only funds during the recent upturn. These funds are believed to have retained their positions in Chinese stocks but have sold shares in other Asian markets in response to investor redemptions. Comparing April's position changes with those of 1Q24, the report noted that long-only funds favoured growth stocks, led by TENCENT (00700.HK), MEITUAN-W (03690.HK) and BYD COMPANY (01211.HK), while their reductions of AIA (01299.HK) were also seen to have paused. AAStocks Financial News |
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