Morgan Stanley-China Quantitative Strategy Chinese ADRs – Short Interest a...-105611028

MDecember28,202302:23PMGMTUpdateChinaQuantitativeStrategyAsiaPacificMorganStanleyAsiaLimited++8522848-7102+8522848-8845ChineseADRs–ShortInterestGilbertWong,CFA+8522848-6853andUSOwnershipQuantitativeStrategistChineseADRshaveoutperformedMSCIChinabymorethan2%Gilbert.Wong@morganstanley.comMTD,ashedgefundshavebeencoveringshortsintoyear-end,whilelong-onlymanagersweremainlysellingH-sharestofundJasonNg,CFAtheredemptions.Still,suchoutperformanceisnotdrivenbythecomebackinlong-terminvestors.QuantitativeStrategistJason.Dl.Ng@morganstanley.comKeyTakeawaysLauraWangNasdaqGoldenDragonChinaIndexoutperformedMSCIChina+2.3%MTD.EquityStrategistFundflowshavebeenfavoringChineseADRstooutperformAandHsharesinLaura.Wang@morganstanley.comDecemberashedgefunds'shortcoveringhelped,accordingtoIHSMarkitdata.MorganStanleyappreciatesyoursupportinForlong-onlymanagersflows,theyweremostlysellingHshares,andkeepingAthe2024InstitutionalInvestorAll-AsiaandADRsforpositioninginChina.ResearchTeamSurvey.VotingwillopenearlyJanuary2024.Roundingup2023,US-basedlong-onlymanagerssloweddowntheirsellingonChineseADRssignificantlyfromwhattheydidin2021and2022.Exhibit1:Monthlynetinflows(US$m)ofallChineseADRsfromUS-basedlong-onlyandUShedgefundshavealmostunwoundwhattheynetaddedonADRsin2022viahedgefundmanagerslongselling(US$9.6bn)andshortsadding(US$1.2bn)in2023.Monthl...