A Goldman Sachs report revealed that investors dumped shares of Chinese companies and turned to energy sector stocks buoyed by projections for oil production.
The great money managers World markets have dumped a large volume of Chinese stocks in recent days and added US energy stocks to portfolios at a near-record pace, according to a report from Goldman Sachs based on data from hedge funds and other large money managers.
The decision comes in a context of growing geopolitical tension between the world’s second largest economy and the United States. “As concerns around geopolitics grew, the chinese equities sold on a net basis for the first time in a month, buoyed by de-risking, with long selling outpacing short covering,” Goldman Sachs said, adding that investors had sold shares both abroad and at home. .
In addition to geopolitical risks, managers closely monitor the China’s economic recovery after the collapse that the economy suffered due to COVID-19. The MSCI index (the index that serves as reference for many funds and as a benchmark to assess the performance of most actively managed funds) has risen 9.6% this year, after a 22% drop in 2022.
Goldman Sachs collected data from its clients, including hedge funds and other large money managers, for the period from April 7 to April 13.
Forecasts for oil, a big driver
Gross exposure to China, which includes short and long fund positionswas down 2.6% in the period and, in parallel, hedge funds were seen buying US energy stocks at the fastest pace in three months, according to Goldman Sachs.
The move was fueled by a rebound in crude oil prices this year, after Saudi Arabia and its OPEC+ allies surprised traders by announcing an unexpected cut to their production target in early April.
The bank noted that US net purchases last week reached a near-record pace in the past five years.
Source: Ambito
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