Singapore Sales Trader
Summary: As China reopening from Covid-zero and continued moves to ease policy, many investors are bullish on the Chinese stocks for 2023. Chinese equities are at attractively cheap valuation. With China loosening Covid curbs, more malls and restaurants reopened and it creates positive impact on the consumer staples and consumer discretionary industries.
As China reopening from Covid-zero and continued moves to ease policy, many investors are bullish on the Chinese stocks for 2023. MSCI China Index has rallied 34% from the low on 31 October after China reopening hopes. Many investors are looking at Chinese equities as they are sitting at attractively cheap valuation. With China loosening Covid curbs, more malls and restaurants reopened and it creates positive impact on the consumer staples and consumer discretionary industries.
Global X MSCI China Consumer Staples ETF (CHIS)
The ETF invests in large and mid capitalization segments of the MSCI China Index that are classified in the Consumer Staples Sector as per the Global Industry Classification System (GICS). It tracks the performance of the MSCI China Consumer Staples 10/50 Index. The index includes China A, B and H shares, Red chips, P chips and foreign listings. The ETF has a market cap of USD 21.8 million, average P/E of 25.83 and expense ratio of 0.65%. Top 5 holdings are Kweichou Moutai, China Resources, China Mengniu Dairy, Nongfu Spring and Tsingtao Brewery, which makes up 40.58% of the total net assets. It has high exposure in beverage and food industries, 53.34% exposure in beverages industry and 25.87% in food industry. The ETF provides semi-annual distribution, 0.94% yield per year.
Global X MSCI China Consumer Discretionary ETF (CHIQ)
The ETF targets play on the Consumer Discretionary Sector in China and tracks the MSCI China Consumer Discretionary 10/50 Index. The ETF has a market cap of USD 289.6 million with an average P/E of 42.31 which is relative high compared to the MSCI China Index average P/E of 11.1 as it consists of more e-commerce stocks in the ETF. The top 5 holdings make up 38.44% of the total net assets, which consists of Meituan, Alibaba, JD.com, Pinduoduo and Yum Chin. The ETF has 40.62% exposure in internet industry, 21.01% exposure in retail industry and 20.07% in auto manufacturers.
A new fragmented world order can render some of today's infrastructure obselete, but it also calls for massive new investments across the globe, which requires a new set of strategic and tactical investment strategies.
Steen Jakobsen,
Chief Investment Officer
As globalisation turns to fragmentation, China seems set on playing a role in the global economy, while simultaneously working towards proofing its own economic situation from external shocks and crises.
Redmond Wong,
Market Strategist
The recent bank runs and ensuing challenges are reminicent of something we've seen before. Will it end like the S&L crises of 1986 and 1995?
Chris Dembik,
Head of Macroeconomic Research
Equity markets need to recalibrate to another - fragmented - global world. What's your view on equities in this market - are they going up or down?
Peter Garnry,
Head of Equity Strategy
With every development comes new opportunites, some of which could be in India. Have you considered the country as a part of your diversification strategy?
Charu Chanana,
Market Strategist
A collar is an option strategy that allows some protection while maintaining some upside potential. What investment would you like to use a collar strategy for?
Hans Oudshoorn,
Trainer Academy
There are arguments to be made for many commodities to have upside. Which are you paying the most attention to this quarter?
Ole S. Hansen,
Head of Commodity Strategy
In a very challenging macro environment, which currencies do you think will come out on top?
John J. Hardy,
Head of FX Strategy
