Source: Bloomberg
Author: John Cheng, Henry Ren
China's economy has slowed down and pond fish, and its business seriously relies on China's overseas companies. Therefore, global stock investment managers are seeking hedging risks.
As the downturn in the Chinese real estate market may evolve into a systemic crisis, investment related to China has become the source of troubles from the most promising bets during the year.Although the decline so far is mainly concentrated in the Chinese stock market, stocks in Europe, the United States and other parts of Asia are also facing increasing pressure, and its business is affected by Chinese demand.
Caterpillar and DuPont and many companies issued early warnings in the latest performance reports.China's economic growth is expected to be reduced, and investors seek to reduce the risk of investment portfolio.An MSCI index that tracks the largest multinational company in China has fallen by about 10%this month, and the decline is twice that of the global stock index.Bank of America strategists believe that when China's economic deterioration, U.S. stocks will fall 4%.
"Frankly speaking, the entire world is inseparable from China. Large multinational companies either sell products from China or purchase goods from China," Jason HSU, chief investment officer of Rayliant Global Advisors."In the next 12 months, these companies will have to significantly reduce their income from China."
After the launch of negative news on Monday this Monday, investors, enterprises and consumers' confidence in China's economic prospects are shrinking rapidly.These negative messages include disappointing economic data and shadow bank giants. The planting enterprise group suspended from paying to thousands of customers, and the real estate group Country Garden is closer and closer to public bond defaults.
The increasingly intensified concerns caused the benchmark stock index in Hong Kong and the mainland to the lowest level since November last year, and the Hang Seng Index entered the bear market on Friday.Moreover, in view of China's dominant position in the global supply chain, this concern has also begun to affect the emotions of European and American investors, and the stock market in these two regions has also experienced the largest decline since March.
GAMA Asset Management Sa Rajeev de Mello, a global macro -investment group manager in Geneva, said that unless Beijing introduced more supportive policies, "many asset categories will be affected", and he has reduced European stocks,The opening of commodities, gold and emerging market currencies.
