Foreign fund flows into China lose steam even as stocks hit 10-year high

Chinese equities record net inflows of US$900 million in August, down from US$2.7 billion in July, Morgan Stanley says

Foreign buying of Chinese stocks continued for a third month in August, albeit at a slower pace, as long-only funds increased their exposure to the mainland’s US$12.3 trillion stock market following a key benchmark’s rise to a 10-year high.

Inflows from US and European funds into Chinese equities eased to US$900 million in August from US$2.7 billion in July, according to a Morgan Stanley report on Thursday. Passive funds logged inflows of US$1.4 billion. Meanwhile, active funds recorded outflows of US$500 million, the lowest since mid-2023.

The numbers brought the year-to-date cumulative foreign long-only fund inflows to US$1 billion compared with outflows of US$17 billion a year earlier.

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