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Institutional Insights: Goldman Sachs Flow of Funds Update
According to "GS Tactical Flow-of-Funds: China – The China Trade (TCT) – Update"
China fear of missing out “FOMO” is increasing.
a. I received the largest ever number of incoming questions on China this weekend. Investors are doing work right now.
b. This is new, and S&P is not the horse to ride this October (I will be back tomorrow on this).
c. TCT – The China Trade – Checklist – there are more buyers than sellers... These are the 10 points that I am tracking right now.
d. We recommend November FXI Call Spreads and November EEM Calls.
Hong Kong daily turnover surged to a new record high of $54 Billion USD - exceeding the previous record set on Friday. Today's volume surge is 4.7x of the 52w daily average.
China onshore domestic daily turnover was 2.6 Trillion yuan - which was also the largest turnover on record.
3. China A-share margin buying last week surged suggesting that retail participation picking up. This chart is as of Friday's close, and I anticipate this being higher today.
New Account Openings: China Brokers (GSXACHBR +10%) led the market again - although onshore brokerage CSC Financial of “over 1.4m new account opening queuing up.” This data is as of August. I expect to see a surge in new account openings
GS PB update on China: over the last week, Chinese equities saw the largest weekly net buying on our book’s record - driven almost entirely by long buys with single stock making up 71% of the notional net buying
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!