China's market turning sour as trade war pushes foreigners away

Investors should be cautious about capital outflows given expectations the yuan will fall more, Jianghai Securities said

Expectations that US$200 billion of foreign money would flow into China’s capital markets this year are looking nothing short of optimistic.

For overseas investors, a weaker currency is the latest factor making yuan-denominated assets less attractive. 

They’ve been selling mainland-listed stocks at a record pace and their demand for Chinese bonds has been relatively tepid: monthly inflows have averaged at just 6.8 billion yuan ($984 million) this year, versus the 44.4 billion yuan seen in 2018, ChinaBond data show.

What had started as a promising year in China’s markets is quickly turning sour as the country’s trade stand-off