From Yahoo Finance: 2024-06-21 03:30:52

Investors in China are turning away from domestic markets due to a sliding yuan and moving their cash to better-yielding assets in Hong Kong. Yuan has hit seven-month lows with an increase in offshore investment. Chinese stocks markets have taken a hit despite earlier rallies and stimulus expectations.

Foreign investors who returned to the Chinese market earlier this year after a dismal 2023 have now started selling, pulling out billions via the Stock Connect Scheme. The upcoming Communist Party plenum in July and progressive easing measures by the PBOC are key factors affecting market sentiment.

Mainland investors are flocking to Hong Kong for better returns on offshore yuan due to low yields back in China and expectations of further easing measures. The CNH has depreciated against the Hong Kong dollar, with record levels of yuan deposits in the financial hub. U.S. rate cuts could impact Hong Kong’s economy via its peg to the dollar.



Read more at Yahoo Finance: Analysis-Cash is leaving China again, pressuring yuan