An investor watches stock prices at a brokerage office in Beijing, China July 6, 2018. REUTERS/Jason Lee
Reuters: Pain and pressure: market turmoil pushes some China funds to the brink
SHANGHAI (Reuters) - It’s already been a harsh year for Chinese funds, hit by new rules aimed at reining in debt in the country’s financial system. Now, the sell-off in China stocks induced by trade war anxiety further threatens their health and for some, their survival.
Case in point: private fund house Nanjing Hu Yang Investment Co has seen its assets under management halve to 50 million yuan ($7.5 million) over the past year on redemptions and investment losses.
Its chairman, Zhang Kaihua, said he is putting his funds, which bet on consumer stocks, into “a state of dormancy”. He’s also stopped publishing fund performances and shelved capital raising plans.
“Our only hope is that our existing clients can stick with us so that we can survive,” he said, adding that he has seen many of his peers drop out of the market.
In the past when market turmoil has hit China’s fund industry, such as in 2015, it has managed to bounce back on loose monetary policies and relaxations in rules for the sector.
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WNU Editor: My friends in China are telling me that they believe that the U.S. will throw in the towel on this trade war, and that the status quo of trade deficits will return. I do not know where they are getting their information , but I do know that this observation from Reuters is spot on .... China's 'firefighter' vice president avoids flames of U.S. trade war (Reuters). As long as Vice President Wang Qishan remains on the sidelines, there is no U.S. - China trade deal on the table.
