© Reuters. FILE PHOTO – An investor looks at his mobile phone in front of a board displaying stock information at a brokerage office in Beijing, China January 2, 2020. REUTERS/Jason Lee/file photo
NEW YORK/LONDON (Reuters) – Global hedge funds have added more Chinese stocks to their portfolios than they have sold in recent days for the first time in seven weeks, Goldman Sachs Group (NYSE:) said in a report.
According to Goldman Sachs, the movement seen in the inside and outside stocks was mainly driven by short caps. This means that investors who bet on Chinese stocks were forced to get rid of their bearish positions by buying back borrowed shares.
Of the 11 sectors tracked by Goldman Sachs, which tracked between June 30 and July 6, only health care, financial services, telecoms services and real estate were sold.
Last week, China’s ADRs gained in sectors from e-commerce to online education and ETFs in hopes of more government economic support, forcing bearish investors to close short positions.
The Wall Street bank runs one of the world’s largest prime brokerages, which provides lending and trading services to investors and is able to see how large hedge funds and asset managers are moving.
This investor movement comes amid geopolitical tension between the US and China and weaker-than-expected inflation readings.