Bloomberg - Chinese investors are backing away from Western companies, blame politics and uncertainty for a souring stance on the world second biggest market.
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On Tuesday, representatives from Man Group, Soros Fund Management and Elliott Management raised concerns over the outlook for Chinese stocks traded in New York and Asia. Their comments came weeks after $59 billion investment firm Marshall Wace said some of these businesses were uninvestable. We are not putting money into China right now, said Dawn Fitzpatrick, chief investment officer of Soros, at the Bloomberg Invest virtual conference.
Fitzpatrick predicted that many companies listed in Hong Kong would soon relocate to the U.S. While she didn't name any firms, Alibaba Group Holding Ltd. JD.com Inc. and Didi Global Inc. are among some of the largest Chinese businesses whose business in New York is traded with Alibaba Group Holding Ltd. The three companies have been under pressure most of the year as China cracked down on mega-cap tech companies. Alibaba and Didi have been down to at least 33% since mid-February, while JD.com has plunged 47% since its market debut in late June.
The Shanghai Composite Index gained just 2.7% this year, trailing the 12% gain for MSCI World Index.
Soros s Fitzpatrick says his firm is not putting any money into China and isn't investing in Chinese investors.
The investor warnings follow Beijing's global anti-monopoly probes against Big Tech, cybersecurity reviews for foreign listings and a decision to ban profits in after school tutoring companies, which sent shock waves through international financial markets. If you invest in markets, it is impossible to have no view about China, Man Group plc chief executive officer Luke Ellis said at the Bloomberg Conference. He added that the country looks less attractive than a year ago amid the crackdown on the Tech and Education sectors.
Ellis also recommended that investors need to be more nimble, as holding investments with a 10-year horizon doesn t make sense in a world where interventions and significant policy changes are expected.
What China is doing is quite different, but it does not that much different than what we see in a lot of the Western markets, he said.
It will continue to grow faster than the developed markets, President and CEO of Blackstone Inc. commented at the Bloomberg conference. They ve got an very entrepreneurial culture, they ve got a government that wants economic growth to improve the quality of lives and I think that means, broadly speaking, that China should do well. Elliott Investment Management, co-CEO of activist investor Jonathan Pollock, also suggested there would be opportunities, though added that thinking of big deployment is difficult.
Meanwhile, Marshall Wace co-founder Paul Marshall told clients in August that it is more likely than ever that China s listings will be confined to the mainland.
The effect of these various interventions, especially the timing of announcements around Didi listing in the U.S. has been to discourage many U.S. - based or international investors, Marshall said. You could argue that Chinese depositary receipts are listed as noninvestable in the US. None of Atlanta s wealthiest District wants to secede from Atlanta's top 5 votes.
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