BlackRock, the world’s largest asset manager with $9.4 trillion in assets, has dramatically reversed its pro-China stance in recent days, closing a fund and issuing dire forecasts about China stocks.
The asset manager may be pulling back from China out of well-grounded macroeconomic concerns. But, given the considerable fear, uncertainty, and doubt (FUD) that its engagement with China stoked in recent weeks, more cynical observers may view the pivot as a face-saving effort.
BlackRock Adjusts Its Rating of China Stocks
On Monday, the asset manager downgraded its rating of China stocks from “neutral” to “overweight.”
According to Bloomberg’s report, the adjustment has to do largely with the lack of solvency in China’s commercial real estate industry.
US lawmakers have devoted increasing attention in recent months to instability in China’s heavily credit-based real estate sector. And also to what they see as the questionable accounting practices of Evergrande and other conglomerates with massive debt.
Yesterday, police in China took the drastic step of detaining some members of Evergrande’s staff after many missed payments on the conglomerate’s debt. And many efforts to kick the can down the road.
The instability in the sector cannot have made a favorable impression on BlackRock’s analysts. Their adjustment of the rating comes on the heels of BlackRock’s decision earlier this month to close its China Flexible Equity Fund as of November 7.
The fund was a flop, garnering a mere $22.3 million in assets since it formed in October 2017.
Go to Source to See Full Article
Author: Michael Washburn
Tip BTC Newswire with Cryptocurrency
Donate Bitcoin to BTC Newswire
Donate Bitcoin Cash to BTC Newswire
Donate Ethereum to BTC Newswire
Donate Litecoin to BTC Newswire
Donate Monero to BTC Newswire
Donate ZCash to BTC Newswire
