Goldman Sachs: Hedge funds are currently bottom-fishing in Asian markets at the fastest pace in a decade.

Due to the optimism of the market towards artificial intelligence infrastructure companies, hedge funds' net buys in emerging and developed Asian markets last week reached the largest level since Goldman Sachs began tracking related data in 2016. Exposure to Asian stocks has risen to at least the highest level since 2016. According to a report by Goldman Sachs, hedge funds turned net buyers of global stocks last week for the first time in three weeks, with funds flowing into all major markets, but Asia showed the most outstanding performance. Hedge funds focused their bullish trades on South Korea and China, with a "moderate sell-off" occurring in the Indian market. The report stated that hedge funds bought stocks in most industries in both developed and emerging markets in Asia, including real estate, technology companies, industrial stocks, and consumer discretionary stocks, but did not involve financial stocks. Goldman Sachs' report pointed out that as investors rotate out of momentum trading and react to the weakening US dollar, emerging markets continue to outperform. The MSCI Emerging Markets Index has risen by 11% this year, while the Korea Composite Stock Price Index (Kospi) has risen by over 30%, boosted by large manufacturing companies such as Samsung Electronics and SK Hynix. In contrast, as of last Friday's close, the S&P 500 index fell by 0.1%. In Goldman Sachs' report to clients, trading in Asian markets last week was mainly driven by long buying, with a ratio of 8.4 to 1 between long positions and short covering. Looking at global industries, Goldman Sachs stated that the buying intensity in the information technology, industrial, consumer staples, and materials sectors exceeded the selling intensity in other sectors. Consumer discretionary, communication services, and financial sectors faced the most severe selling. After four consecutive weeks of net selling, the number of buyers of US stocks by hedge funds slightly exceeded the number of sellers. Hedge funds have been selling the US real estate sector for the third consecutive week, and the selling pace is the fastest since September 2022, including both long liquidation and short additions. Goldman Sachs' report noted that the scale of selling in professional real estate investment trusts (REITs), real estate management and development companies, and industrial REITs exceeded the small buys in hotel and resort REITs and healthcare REITs. Goldman Sachs stated that the indicator of hedge fund risk exposure - the total leverage ratio - increased from 301.2% in the previous week to 307%, reaching a five-year high. This article is republished from "Wall Street See News", GMTEight editor: mz.