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Themes on the move: Chinese Internet stocks boosting their comeback

Picture of Anders Nysteen
Anders Nysteen

Senior Quantitative Analyst, Saxo Bank

Summary:  Chinese internet companies posed a strong week last week due to considerations on loosening covid-19 restrictions, and the theme was the top scorer in our weekly thematic screener.


In our weekly publication series we monitor trends in a pool of more than 40 ETF equity themes. Every week we focus on one themes which have moved the most in the previous week relative to its usual trading pattern and volatility, and we provide an unbiased sample of companies within the theme. This week the we describe the theme which has made the largest deviation from the usual trading pattern.

Chinese internet stocks seem to be benefitting greatly from a reopening of Chinese economy after the government provided signs on easing covid-19 restrictions last week. And today the stocks are bouncing further as major cities in China reportedly loosened covid-relations more. Investors are hoping that lighter restrictions will cause a rebound in the economic activity and increase the consumption, e.g. by boosting the online shopping sentiment. The theme on Chinese internet stock was scoring the highest in our thematic model, where we look into themes which are deviating from their usual trend. It was also the high scorer in our model a month ago, where the theme started its current comeback trend.

The list below illustrates 10 different companies within the theme. They are spanning a broad area of the theme and is intended as an inspirational list only:

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Source: Bloomberg and Saxo Bank

How the list was created: Each theme consists of a number of companies from ETFs and indices within the given theme. The list above is created by sampling 10 different companies from the theme, making sure that the companies have a low mutual correlation within the theme, such that they span a broad part of the overall theme. Note that this is based on historical performance which is not an indicator for future returns. The list is for inspirational purpose only and should not be considered as trade recommendations in any way.

Price evolution of a thematic ETF within the theme - over 6 months and 5 years, respectively:

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