Battered China Traders Sell Engagement Ring, Grandpa’s Watch
(Bloomberg) -- China’s slew of retail investors that piled into mutual funds in the past year are now offloading prized heirlooms as they cope with losses they have suffered under the country’s $1 trillion stock market rout.
More than 200,000 users have flocked to Chinese online resale platform Xianyu in the past week, seeking to offset losses from their mutual fund investments by putting precious possessions for sale, according to a statement posted Friday on the marketplace affiliated with Alibaba Group Holding Ltd.
“A diamond engagement ring” and “a watch passed down by the great grandfather” were among the possessions for sale, the statement posted on Xianyu’s official WeChat account said. The company was referring to items that were being advertised with the phrase “mutual fund losses.” It was unclear how many sellers who used the keyword had actually suffered losses.
The message from Xianyu comes as Chinese investors pile into professionally managed funds to chase market-trouncing returns, shifting away from a once more popular do-it-yourself style of trading stocks. However, with money managers having thrown cash at a handful of market darlings like Kweichow Moutai Co. -- pushing the liquor-maker’s valuations to near records -- the correction in stocks has also accelerated mutual fund losses on the way down.
“It may be convenient to dispose of idle goods when you need money following investment losses, but be wary that the price is separating from valuable memories,” Xianyu said in the statement.
China’s stock market has wiped out $1 trillion in value in the past three weeks. The CSI 300 Index fell 2.2% at the close on Monday, as persistent liquidity concerns overshadowed data showing the strength of the nation’s economic recovery.
Still, some market watchers downplayed the significance of the Xianyu statement, arguing that mutual fund investors should accept losses in volatile markets in anticipation of long-term profits. And some investors that put up possessions for sale didn’t seem to be motivated by making up for losses.
“I am putting this piece of mineral up for sale to double down on mutual funds once the market rebounds,” one user on Xianyu said, offering a blue-colored stone for sale for 35 yuan ($5.40).
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