Share prices of Chinese companies listed on the New York Stock Exchange have depreciated sharply since the start of the year, continuing a downward trend over the past 12 months, Markets Insider reports.
The Nasdaq Golden Dragon China Index, which includes shares of Alibaba, Baidu and 67 other U.S.-listed Chinese companies, has fallen more than 14 percent since the start of January and 30 percent over the past 12 months.
With the only exception in October 2022, the value of the index has not been this low since June 2023, according to data from the specialist company Refinitiv.
The sharp downward trend over the past 12 months has added to multi-year losses since 2021, and Chinese companies have lost more than $6 trillion in market capitalization since then.
Official data released by China last week showed the world’s second-largest economy grew by 5.2 percent in 2023, but investor concerns remain as the government in Beijing grapples with deflation, falling demand and massive youth unemployment.
Added to this are the problems of China’s big real estate companies, which have fueled impressive economic growth for years.
The outflow of foreign investors from the stock market
Under these conditions, an analysis published by the Financial Times late last year also found that not only Chinese companies listed on the US stock exchange are struggling, but also Chinese companies that have faced an outflow of foreign capital in the past year. quarter of 2023.
After peaking at 235 billion yuan in August, net foreign investment in Chinese stocks fell 87 percent to 30.7 billion yuan as of Dec. 28, according to FT analysis.
That means foreign investors pulled about $29 billion out of China’s stock market, with the outflow largely driven by concerns about the Asian nation’s economy.
A key turning point for investors came in August, when one of China’s biggest developers, Country Garden, announced for the first time that it would default on bond payments it had issued and warned it was at risk of defaulting.
Since then, China’s stock market has seen a net sell-off by foreign investors amid concerns that problems in the housing sector could spread to other markets.
PHOTO: Bbbar, Dreamstime.com.
Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.