China ETFs move higher on Yuan appreciation
China ETFs outpaced all foreign markets Monday. The surge occurred after China's central bank said over the weekend it would allow the yuan to gradually appreciate against the dollar.
"It will stimulate domestic demand in China because a stronger yuan will increase Chinese consumer purchasing power," said Alec Young, international equity strategist of S&P Equity Research. "(It) will help China diversify its growth away from exports and towards domestic demand."
China will have more buying power in global markets for everything from commodities to luxury goods, said Jim Trippon, editor of China Stock Digest. More importantly, China's move signifies its confidence in its economic recovery.
Global X China Financials (CHIX) led all nonleveraged China ETFs. It gapped up 4% but closed in the lower end of its intraday range at 13.76. It cleared high above its 10 week moving average. Still, it may face overhead price resistance at its prior high of 15. It also charges a 0.65% annual expense ratio.
CHIX's largest holding that trades in the US, China Life Insurance (LFC), accounts for 10% of assets. The 35-stock ETF holds a mix of banks, insurance and real estate companies. China Life gapped up 1.6% to 68.46 in slightly higher-than-average volume. But it closed in the lower end of its intraday range and failed to break above its 40-week moving average. CHIX has lost 10% since it started trading in December.
Global X China Technology (CHIB) gapped up 3.6% to end at 14.81. The 26-stock ETF closed above its 10-week moving average for the first time in nearly two months. Internet companies account for nearly half of assets. They are followed by telecom 27% and computer hardware and software, with a combined 25% weighting.
Investors across the globe continued to dump stocks Friday as weak economic indicators from major nations including China intensified fears of a new recession.
Read More
The Shanghai Composite is down 11% year to date as China institutes measures to cool their economy and avoid a housing bubble.
Read More
Investing in China has not been the easiest practice in the past, but more and more opportunities are arising and one of the best currently is the iShares FTSE/Xinhua China 25 Index that trades on the NYSE under the ticker FXI.
Read More
Morgan Stanley came out this week stating that the Chinese stock market is currently the most attractive in the world and should outperform going forward.
Read More
After halting the two-day losing streak on Monday that cost it nearly 120 points or nearly 5 percent, the China stock market turned back to the downside on the following day.
Read More