Article details
BNY's Geoff Yu highlights that Chinese equities and the Chinese Yuan (CNY) remain significantly under-owned compared to Asia-Pacific (APAC) peers, with cross-border holdings at historically low levels. This under-ownership suggests potential for re-entry as investors may rebalance portfolios toward undervalued assets. The analysis points to a structural shift in capital flows, driven by geopolitical factors and regulatory changes in China.
For markets, this under-ownership could signal a correction opportunity if risk appetite improves. Traders should monitor CNY cross-border flows and Chinese equity inflows, as these could indicate broader capital reallocation. The CNY's performance against the USD and other APAC currencies may also gain volatility if policy clarity emerges.
For Gulf investors, the under-ownership of Chinese assets presents a long-term diversification opportunity. Watch for policy easing in China and shifts in APAC risk sentiment. Key indicators include Q2 Chinese GDP data and central bank interventions in cross-border capital controls.
