EM Funds Continue to Reduce China Exposure – JPMorgan By Investing.com

Investing.com– Emerging market funds continued to cut exposure to China amid lingering doubts about the country’s economic recovery, JPMorgan said, as outflows from Chinese stocks continued.

Underweight positions on China were at their highest level since December 2021, JPM said, while funds flow data showed outflows of $8.5 billion from Chinese stocks so far this year.

Meidan EM funds’ allocation to China was 1.1% below the benchmark, JPM noted.

The trend comes on the back of a series of disappointing economic readings from China over the past two months, which have further undermined long positions on the country. Chinese shares also largely struggled to keep up with their Asian peers as the region was rocked by a bank in Japan and renewed worries about a US recession.

A recent note from Alpine Macro showed that China’s economy remained in a difficult situation, with government efforts to boost growth also having limited effects. Slowing private consumption, capital spending and a persistent deflationary trend weighed heavily on the economy, as well as a prolonged slowdown in the country’s housing market.

China and indices both remained at more than six-month lows. But Hong Kong’s index fared much better, settling just below a five-week high as it benefited from bargain buying in Chinese heavyweights on the Internet.