Bridgewater, the world’s biggest hedge fund with US$197 billion of assets, held US-listed depositary shares in 18 Chinese companies valued at US$578 million on December 31, compared with holdings in 45 firms worth US$1 billion a year earlier, according to filings.
The MSCI China Index, which tracks more than 700 companies traded at home and abroad, slumped 4.5 per cent in the three months ended December, bringing the decline in 2023 to 11 per cent. It was the market’s worst losing streak in two decades, after annual losses of about 22 per cent in 2022 and 2021.
Investors want Beijing to do more to keep the US$380 billion stock rally going
Investors want Beijing to do more to keep the US$380 billion stock rally going
That may have benefited state-owned investment vehicles like Singapore’s Temasek Holdings and Saudi Arabia’s Public Investment Fund (PIF), after both of them retained most of their Chinese stock holdings last quarter.
Temasek maintained its bets on eight Chinese firms including Alibaba Group, JD.com and Yum China, its latest 13F filing showed. Still, it divested a US$42 million position in the KraneShares CSI China Internet ETF, an exchange-traded fund that tracks US and Hong Kong-listed tech leaders such as Alibaba, the owner of this newspaper.
Similarly, PIF kept its positions in PDD Holdings, Alibaba and BeiGene last quarter, pausing after raising its bets in preceding quarters, the filing showed.
Year of the Dragon: Hang Seng to attempt 20,000 points as funds seek to end pain
Year of the Dragon: Hang Seng to attempt 20,000 points as funds seek to end pain
However, Asian fund managers remained hesitant about chasing Chinese stocks despite measures by Beijing to halt the market downturn and restore investor confidence, Bank of America said in a report on February 13, based on a February 2-8 survey of people managing US$331 billion of assets.
More survey participants expected a weakening rather than a strengthening in the year ahead for the first time since the periodical survey began 17 months ago, the US bank said. The majority of them were willing to sit out or avoid the market, including 15 per cent who were looking to cut risk on any bounces, the report added.
Fund allocations for Chinese equities sank to a record low of net 23 per cent underweight, the survey showed. There was overwhelming demand for monetary policy easing but a concerted action has been lacking, the survey noted.
“There’s a latent need for policy sponsorship [in China] to be stimulative, and then the only question is when’s that going to happen and what form will it take,” Bridgewater’s Prince said. “They probably need more.”