Chinese Stocks A Big Brexit Winner So Far

In the event of the Fed staying dovish and/or the RMB depreciating further against the USD, Goldman Sachs analysts anticipate that macro flows would stay equity-friendly in the near term. Si Fu and team point out in their August 24 research piece titled “China Musings: The war of liquidity: Who wins, and how to engage?” that MXCN is trading at around mid-cycle levels, and even higher excluding banks.

MSCI China rallied 12% since Brexit vote

Fu and colleagues note that even though the MSCI China has rallied 12% on a YTD basis since the Brexit vote, China remains a laggard versus EM and APJ. The analysts break the flows into three major components: (a) Passive ETFs across mandates, (b) Active funds and (c) Southbound...