Can the Epic Rally in Chinese Stocks Continue?
Chinese stocks surged 8.5% yesterday, marking their best day since 2008, as the country’s official PMI for September came in better than expected. Stocks extended a rally that began last week after policymakers unleashed sweeping stimulus measures to boost growth.
The People’s Bank of China announced cuts to the benchmark interest rate and the reserve requirement ratio, along with reductions in mortgage rates for homeowners and loans to investors and companies to buy back their stock.
The Politburo, chaired by leader Xi Jinping, also pledged more fiscal support to ensure the economy meets the official 5% growth target for the year. These measures suggest the government's focus has shifted decisively to economic growth.
This came after three years of limited support from authorities for the ailing economy, and it remains to be seen whether these measures will be enough to prevent the world’s second-largest economy from slipping into a deflationary spiral.
The stimulus set off an epic rally in Chinese stocks and in sectors exposed to China, including copper, miners, casino companies, luxury goods makers, and European automakers.
Last week, billionaire David Tepper, president of hedge fund Appaloosa Management, told CNBC he was bullish on Chinese equities, saying he has bought "everything" related to China.
The KraneShares CSI China Internet ETF KWEB provides exposure to Chinese internet companies listed on the Hong Kong or US exchanges.
The iShares MSCI China ETF MCHI provides exposure to multiple classes of Chinese equities that are available to international investors, such as H-shares, B-shares, Red-chips, P-chips, and foreign listings.
Alibaba BABA, Tencent Holdings TCEHY, JD.com JD and Pinduoduo PDD are among the top holdings in these ETFs. To learn more, please watch the short video above.
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Get it free >>Tencent Holding Ltd. (TCEHY) : Free Stock Analysis Report
iShares MSCI China ETF (MCHI): ETF Research Reports
JD.com, Inc. (JD) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
KraneShares CSI China Internet ETF (KWEB): ETF Research Reports
PDD Holdings Inc. Sponsored ADR (PDD) : Free Stock Analysis Report
