Here's what happened in China's markets last trade day (11/27):
1. China's CSI 300 Index to Include More Tech Firms
China's CSI 300 Index, akin to the S&P 500, is set to include more technology-related companies in its bi-annual review. This move reflects China's evolving economy driven by technological advancements. Chip industry leaders like Cambricon Technologies, Empyrean Technology, and Hygon Information Technology will be added, aiming to balance the index, currently skewed towards financials and consumer staples.
$CSI 300 Index(800122.HK$ $CSI 300 Index(000300.SH$ $S&P 500 Index(.SPX.US$ $Kraneshares Tr Bosera Msci China A Sh Etf(KBA.US$ $iShares China Large-Cap ETF(FXI.US$ $iShares MSCI China ETF(MCHI.US$
2. Renewed Pressure on China's Financial Sector from Shadow Banking Scandal
2. Renewed Pressure on China's Financial Sector from Shadow Banking Scandal
Zhongzhi Enterprise Group, a major shadow banking institution in China, revealed a $36.4 billion liquidity hole, causing concern in the financial sector. Facing a criminal probe, the company's situation highlights challenges in China's real estate market and a bear market. While substantial, the loss isn't anticipated to create systemic issues.
$中国金融指数ETF-Global X(CHIX.US$ $BANK OF CHINA(03988.HK$ $HSBC HOLDINGS(00005.HK$
3. Approval for Chinese Property Developers to Launch REITs
3. Approval for Chinese Property Developers to Launch REITs
China Resources Land, China Jinmao Holdings, and SCPG Holdings received approval to launch real estate investment trusts (REITs), allowing them to raise funds for expansion. These spin-offs offer investors alternatives to traditional yield-generating instruments and contribute to stabilizing income.
$Global X MSCI China Real Estate ETF(CHIR.US$ $COUNTRY GARDEN(02007.HK$ $CG SERVICES(06098.HK$ $LONGFOR GROUP(00960.HK$ $LONGFOR GROUP HLDG(LGFRY.US$ $EVERGRANDE(03333.HK$ $EVERG SERVICES(06666.HK$
4. Decline in Chinese Yuan's Share in International Payments
4. Decline in Chinese Yuan's Share in International Payments
In October, the Chinese yuan's global payment share decreased to 3.6% from 3.71% in September. Despite this dip, the yuan remains the fifth most popular currency globally. The longer National Day Holiday in October likely contributed to the temporary decline in global transactions involving China.
$CNH/CNY(CNHCNY.FX$ $HKD-RMB DUAL COUNTER MODEL(BK1352.HK$ $USD/CNY(USDCNY.FX$ $HKD/CNY(HKDCNY.FX$
5. Double-Digit Growth in China's Software and IT Sector
5. Double-Digit Growth in China's Software and IT Sector
China's software and information technology sector witnessed robust growth in sales and profits, with a 13.7% YoY increase in revenue (RMB 9.82 trillion) for the first 10 months of 2023. Profits grew similarly at 13.8% (RMB 1.14 trillion), reflecting the impact of AI, increased demand for cloud services, and augmented reality adoption in various applications.
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