LI - China's Shanghai Composite plummets to a four-year trading low

2024-01-19 14:40:07 ET

A handful of Chinese stocks and exchange traded funds have caught a topside bid on Friday afternoon even though the broader Chinese stock market fell to a new four-year trading low this week.

The Chinese stock market continues to feel the downward pressure with news breaking that the nation’s largest brokerage has suspended short selling for specific clients in an attempt to prevent an accelerating decline.

Citic Securities Co., the state-owned firm headquartered in Shenzhen, has halted the lending of stocks to market players and increased its requirements for institutional clients this week, according to Bloomberg.

China’s CSI 300 Index ( SHSZ300 ), which is designed to mirror the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange, is lower by 4.5% in 2024, reaching a decline of 7.5% on Thursday. Bigger picture, the index is down by 14.3% over the past 6-months, 20.7% over the past year and now trades at its lowest level since January of 2019.

See below a weekly chart of the benchmark index dating back to 2019, showing the four year low.

The slide has pulled down some of Wall Street's most popular Chinese names. One name specifically is Alibaba ( NYSE: BABA ), which now trades below its IPO price, set back in September of 2014.

Highlighted below are the year-to-date performances of some of China’s popular stocks and exchange traded funds:

China Stocks Year-to-Date Price Action:

• NIO Inc. ( NIO ) -33.9% .
• Li Auto ( LI ) -24.9% .
• JD.com ( JD ) -23.3% .
• KE Holdings ( BEKE ) -15.1% .
• Meituan ( OTCPK:MPNGF ) -13.6% .
• Baidu ( NASDAQ: BIDU ) -13.5% .
• Alibaba ( BABA ) -10.8% .
• Tencent Holdings Limited ( OTCPK:TCEHY ) -6.9% .
• NetEase ( NTES ) -2.3% .
• PDD Holdings ( NASDAQ: PDD ) -2% .

China ETFs Year-to-Date Price Action:

• Direxion Daily FTSE China Bull 3X Shares ( YINN ) -28.5% .
• Invesco Golden Dragon China ETF ( PGJ ) -14.6% .
• Invesco China Technology ETF ( CQQQ ) -13.2% .
• KraneShares CSI China Internet ETF ( NYSEARCA: KWEB ) -12.1% .
• iShares China Large-Cap ETF ( FXI ) -10.1% .
• SPDR S&P China ETF ( GXC ) -9.5% .
• iShares MSCI China ETF ( MCHI ) -9.4% .
• Franklin FTSE China ETF ( FLCH ) -8.8% .
• iShares MSCI China A ETF ( CNYA ) -5.8% .
• Xtrackers Harvest CSI 300 China A-Shares ETF ( ASHR ) -5.6% .

While negative pressure could still exist for many Chinese stocks and exchange traded funds, Friday has seen an advancement in many of the names that are highlighted above.

Moreover, KraneShares, the ETF issuer of the popular KraneShares CSI China Internet ETF ( KWEB ), stated in its 2024 China Outlook Report: “In 2024, we believe the recovery could broaden and accelerate while stimulus measures implemented in 2023 may begin to have a positive impact on the economy and stock market.”

More on Markets

• Dividend Roundup: Costco, Target, Dell Technologies, Pfizer, and more
• UBS says markets can rally in 2024, prefers tech and semiconductors
• Top 10 best performing chip stocks of 2024, including NVDA, AMD and MRVL
• Recent conflicts spotlight aerospace/defense space; See the top 10 best recent performers
• Investors retract capital from the fund market for the fourth week in six

For further details see: