Chinese investors are fleeing the country's stock markets amid year-end money shortages and concerns over the IPO resumption early next year.
The country's A-share markets together have seen capital outflow of 110billion yuan for the first 27 days in December, which is 87.16 percent higher than that of November and compared with a net inflow of 727.9billion yuan during the same period of last year, the Chinese Securities Journal reported.
Investors are pulling their money out of China's stock markets ahead of January's IPO resumption which is expected to unleash Chinese companies' fund-raising appetites which have been held back for a year.
About 50 Chinese companies are expected to have finished all IPO procedures and be listed before the end of January 2014. More than 760 companies are in line for approval, and it will take about a year to audit all the applications.
Regulators' recent decision to expand the over-the-counter stock market and open the floodgate of refinancing for those traded on ChiNext, China's Nasdaq, added to investors' concerns over worsening capital conditions, the paper noted.
The withdrawal came at a time of frequent liquidity squeezes in China's financial system since June which pushed up money market rates and expected annualized returns of wealth management products (WMPs). The annualized return of a 96-day WMP launched by China Industrial Bank last week hiked 7.6 percent.
The paper said expected lower economic growth next year is another reason why investors should be worried.
Economists expect China's economy to grow at a slower pace in 2014 due to the government's effort to push ahead with reforms, upgrade the country's economic structure and reduce excessive capacity and leverages in some industries.
Source: Caijing
