InvestorQ : Is it true that there was some massive selling in Chinese stocks by American brokers and what could that indicate?
shrinidhi Rajan made post

Is it true that there was some massive selling in Chinese stocks by American brokers and what could that indicate?

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5 months ago
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Let me tell you that at this point while the selling has been confirmed the identity of the seller remains a matter of conjecture. In one of the biggest cases of bulk selling globally, major markets in the world saw some large block trades with Goldman Sachs executing stock selling to the tune of $10 billion. This was apparently done on behalf of the Tiger Cub Hwang family office.

It is reported that Archegos Capital management was forced by its bank to sell stocks worth $20 billion after some positions they had taken had actually bombed. However, there has been no confirmation about the identify of the buyer and these are more of speculative reports that have appeared. There has been no confirmation by the seller or even by the banker who had ordered the selling.

Some of the shares sold were absolute blue chips including US and Chinese stocks. For example, there was aggressive selling in the shares of Viacom CBS and Discovery, both of which fell by over 25% on Friday. Most of the selling worth $20 billion was done between Goldman Sachs and Morgan Stanley with Goldman Sachs selling around $12 billion of equities and Morgan Stanley selling $8 billion worth of equities.

According to Bloomberg, Goldman Sachs sold close to $7 billion worth of shares of Chinese stocks like Baidu and Tencent which resulted in these two stocks dropping 33% and 48% respectively. It is not clear as of now if this sale had anything to do with US proposal to delist Chinese stocks. Morgan Stanley also sold a total of $8 billion worth of shares on Friday, creating fear of forced deleveraging by clients, which appears to be the case.

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