Emerging market stocks are witnessing significant exits as investors tend to buy US stocks at a record pace due to concerns about a potential global crisis, according to Bank of America investment strategist Michael Hartnett.
A survey of global fund managers conducted by Bank of America showed that September witnessed a record jump in investments in the US market and exits from securities in emerging markets.
According to a report published by the American network “CNBC”, and viewed by “Al Arabiya.net”, Hartnett wrote in the summary of the monthly survey: “A more dramatic shift in relative exposure: a record jump in the United States, and a record decline in emerging market stocks as optimism for growth in China declines.” to its lowest levels since the lockdown.
The shift in investors’ orientation and asset allocations stemmed from the significant decline in growth expectations in China.
The Bank of America poll showed that no one in the poll expects China’s economic growth to exceed expectations. Expectations for growth to exceed estimates fell from 78% in the February poll to 0%, highlighting the current pessimism about the future of the Asian country’s economy.
It is increasingly likely that China will miss its growth target of about 5% this year. Beijing has acknowledged the economic challenges and signaled more political support. The People’s Bank of China unexpectedly cut key interest rates last month.
The Bank of America survey showed that investors see real estate in China as the primary source in this context.
China’s real estate sector woes have accelerated, with new home sales by China’s 100 largest property developers falling by about a third in June and July compared to a year ago, according to Standard & Poor’s Global Ratings.
Last month, the world’s most indebted real estate developer Evergrande filed for bankruptcy protection in the United States, weakening investor confidence in China.
