Salient to Investors:

  • Many investors move money out of China in ways that circumvent its tough limits.
  • China’s foreign-exchange reserves reached nearly $4 trillion in 2014 but have dropped by more than $341 billion since.
  • CBRE estimates that Chinese investment in overseas commercial properties totaled $6.5 billion in half1 2015 vs. $10.5 billion for all of 2014.
  • Goldman Sachs said stability of the yuan and capital outflows are their biggest China concerns and estimated $150 billion to $200 billion has left the country since the August 11th  yuan devaluation.
  • Zhu Haibin at JP Morgan Chase estimates $340 billion left China from Q3, 2014 to Q2, 2015  vs. $264 billion according to Larry Hu at Macquarie.
  • Zhang Ming at Chinese Academy of Social Sciences said capital outflows could worsen in Q3, 2015 because of deprecation expectations for the renminbi.
  • Standard Chartered said polled Chinese companies expect the yuan to weaken with a limited boost to business prospects.
  • Andy Seaman at Stratton Street would not advise shorting the yuan given China’s stated intention to open up the domestic capital markets over time.
  • Zhong Zhengsheng at Hua Chuang Securities said China’s recent efforts to discourage betting against the yuan is a step back from China’s market-oriented revision.
  • Tommy Ong at DBS Bank said Chinese central bank wants to damp short-term speculation of renminbi selling.

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