US hedge funds dumped shares in Chinese companies in Q2

KE Holdings

14/08/2023 18:51

By Carolina Mandl
       NEW YORK, Aug 14 (Reuters) - U.S.-based hedge fund
investors such as Coatue, D1 Capital and Scion cut their
exposure to Chinese companies in the second quarter, as doubts
grew over whether the country's long-awaited reopening would
boost its economic growth, and geopolitical tension increased.
    Coatue Management LLC, founded by Philippe Laffont, formerly
of Tiger Management, cut its positions in Alibaba  9988.HK ,
Baidu  9888.HK , JD.com  9618.HK , Kanzhun  2076.HK , KE
Holdings  2423.HK , Li Auto  2015.HK  and PDD Holdings  PDD.O ,
regulatory filings showed.
    The hedge fund slashed its position in Alibaba by roughly
90% from March to June, filings showed.
    D1 Capital Partners also dumped all its 1.7 million shares -
or $1.7 billion - in Alibaba, according to documents.
    Louis Bacon's Moore Capital Management sold over $200
million in shares of Alibaba, exiting its position in the
company.
    Michael Burry's Scion Asset Management sold small positions
it had in both Alibaba and JD.com. 
    Every quarter, institutional investors have to disclose
their equity positions in so-called 13-F filings, but they do
not provide any explanation for the positioning changes.
    Although they are backward looking, many investors scour
them for trends.                 
    The changes in positioning come as China's abandonment of
COVID-19 controls late in 2022 raised hopes that its economic
growth would surge, but that outlook quickly darkened as data
has showed an uneven recovery, while U.S.-China geopolitical
tensions also raised concern.
    Worries over China's economy have heated up in recent days,
as the country's largest private real estate developer, Country
Garden  2007.HK  seeks to delay payment on a private onshore
bond for the first time, the latest sign of a stifling cash
crunch in the property sector.
    Meanwhile, last week U.S. President Joe Biden announced an
executive order to prohibit some U.S. technology investments in
China, sparkling concerns among fund managers.     

 (Reporting by Carolina Mandl, in New York; Editing by Alison
Williams)
 ((carolina.mandl@thomsonreuters.com; +1 (917) 891-4931;))