Recent economic data in China continues to reveal a slowdown in growth trajectory, as a shift in investor sentiment is reflected in the assets under management or AUM by the end of October 2023.
Figures released by the Asset Management Association of China revealed that AUM held by China's public offering funds amounted to 27.38 trillion yuan (approximately $3.85 trillion).
At the end of October, a total of 11,268 public offering funds were actively managed by 144 fund management companies. Among these 144 entities, 48 were foreign-funded, and 96 were domestic firms.
The value of closed-end funds approached 3.73 trillion yuan, while open-end funds reached approximately 23.7 trillion yuan, according to the data.
This figure marks a decrease compared to the data unveiled by the end of August 2023, which totaled 28.71 trillion yuan (about $4 trillion). At the time, closed-end funds stood at 3.73 trillion yuan, while open-end funds amounted to 23.7 trillion yuan, according to the data.
The shift in investor sentiment can be influenced by market conditions and overall economic outlook. When economic indicators point to a deceleration in growth trajectory, it can trigger a wave of pessimism among investors.
This trend aligns with the recent decline in China and Hong Kong stock markets on Monday. The downward spiral was further exacerbated by a sharp drop in WuXi Biologics (Cayman) Inc. shares following the company's underwhelming forecast.
Chinese stocks plunged
Asian stocks exhibited a mixed performance on Monday, but a series of disappointing economic indicators from China released over the past week dampened investor enthusiasm for Asian equities.
The benchmark CSI 300 Index experienced a marginal decline of 0.3 percent, while the Shanghai Composite Index remained relatively unchanged. Meanwhile, Hong Kong's Hang Seng Index retreated by 0.6 percent, nearing its lowest point in over a year.
WuXi Biologics, a pharmaceutical technology company, saw its shares suspended from trading in Hong Kong on Monday after experiencing a 23 percent plunge. The company's sudden downfall is attributed to a revised revenue forecast indicating slower growth amidst the ongoing economic downturn.
Following the disappointing announcement from WuXi Biologics, the Hang Seng Healthcare Index tumbled five percent, while healthcare companies listed on China A-shares experienced a 1.8 percent decline.
Property developers were the only sector recording positive notes on Monday, as a Hong Kong court granted debt-laden developer Evergrande Group (HK:3333) an extension until late January to address a winding-up petition. This development sent Evergrande's shares soaring over 10 percent, buoying the broader property sector.
China's manufacturing data review
Government data showed ongoing contraction in manufacturing activity, while the non-manufacturing industries recorded the year's lowest growth.
China's private-sector Caixin/S&P Global manufacturing purchasing managers' index (PMI) rebounded to 50.7 in November from 49.5 in October, signaling its fastest expansion in three months. This contrasts with the official PMI, which fell to 49.4 last Thursday. The 50-point mark serves as a demarcation between growth and contraction.
The PMI is a reliable indicator of a country's economic growth. The contrasting readings from China's private and official sectors paint a complex picture of the country's economic growth trajectory. While the private-sector PMI's rebound suggests a pickup in activity, the official PMI's decline indicates broader economic challenges.
The Caixin survey data were supported by the surge in new orders received by Chinese goods producers in November, marking the fastest increase since June. However, the official survey revealed new orders dropped into contraction instead.
Despite the dip in the PMI, the electronic information manufacturing sector demonstrated robust growth during the first ten months of 2023, according to data released by the Ministry of Industry and Information Technology.
A key driver of the sector's strong performance was the surge in smartphone production. China's mobile phone output reached 1.25 billion units during the period, representing a 1.6 percent increase from the same period last year.