US-Listed Chinese Stocks Surge on Policy Boost: Who is Leading the Charge?

On September 24, China introduced its largest economic stimulus package since the pandemic, triggering a massive surge in AH shares and US-listed Chinese stocks. The market response was swift and impressive, with Chinese stocks listed in the US soaring on Tuesday, as the NASDAQ Golden Dragon China Index jumped over 9%—the biggest gain since 2022. Among the standout performers, Kanzhun (BZ.US) surged by over 19%, Bilibili (BILI.US) by 17%, JD.com (JD.US) by 14%, and XPeng (XPEV.US),NIO Inc (NIO.US),Li Auto (LI.US), and PDD Holdings (PDD.US)all saw gains exceeding 11%.

As global investors took notice, there was also a sharp rise in bullish options trading related to Chinese assets, further signaling growing optimism towards Chinese stocks.

Beijing’s Extensive Policy Measures Fuel Market Confidence

The People’s Bank of China (PBOC) recently unveiled a comprehensive stimulus package, aimed at boosting the economy and restoring investor confidence. The package includes several key policy actions:

1. Simultaneous Cuts in Reserve Requirement Ratios and Interest Rates: The PBOC reduced the reserve requirement ratio by 50 basis points (bps) and suggested further cuts by up to 50bps before the end of the year. Additionally, the 7-day reverse repo rate was lowered by 20bps, which has the potential to decrease overall borrowing costs across the economy.

2. Lowering Housing Loan Rates: The government has also moved to lower existing housing loan interest ratesand standardized down payment ratios, which is expected to ease the pressure on homeowners, stimulate consumer spending, and drive demand in the real estate sector.

3. New Tools to Support the Stock Market: Beijing introduced two key financial tools—swap programs for securities, funds, and insurance companies, allowing them to access liquidity through asset collateralization, and special re-lending facilities aimed at providing loans to listed companies and shareholders. These measures are expected to inject around 800 billion RMB into the Chinese stock market, boosting liquidity and improving investor sentiment.

Global Investor Optimism: Will Chinese Concept Stocks Continue to Lead?

According to Lynn Song, ING’s Chief Economist for China, these aggressive policy moves signal Beijing’s determination to fight economic slowdown, deflation, and declining investor confidence. She states:"We view the measures announced today as a positive move. The simultaneous release of multiple policies instead of gradual implementation points to further easing in the coming months, particularly with most central banks globally also on a rate-cutting path."

These measures are designed to rejuvenate consumer spending, relieve pressures in the real estate sector, stabilize domestic demand, and encourage a new wave of investment into Chinese assets. Morgan Stanley’s stock strategist, Laura Wang, also expressed optimism, stating that both A-shares and offshore Chinese stocks may see a tactical rebound, potentially outpacing other emerging markets in the short term.

How to Capitalize on China’s Market Rebound: ETFs or Stock Picking?

For investors looking to ride the wave of Chinese asset recovery, investing in Chinese ETFs offers a straightforward option. Some popular ETFs include:

• Direxion Daily FTSE China Bull 3X Shares ETF (YINN.US)

• KraneShares CSI China Internet ETF (KWEB.US)

• Invesco China Technology ETF (CQQQ.US)

• iShares China Large-Cap ETF (FXI.US)

Alternatively, Singaporean and Malaysian investors who prefer selective stock picking can target companies with strong fundamentals, solid profitability, and good future growth prospects. Analysts are particularly bullish on sectors such as banking, insurance, consumer goods, and internet technology.

China’s Stimulus Fuels Commodity & Luxury Sectors Too

China’s stimulus measures are not just boosting stock prices—they are also driving global commodity prices. As a major global consumer of oil and mineral resources, China’s economic policies have propelled commodity prices and cyclical sectors like metals and mining. On Tuesday, both WTI and Brent crude oil prices rose by nearly 3%, while mining stocks led the charge, with the S&P Metals & Mining Select Industry Index gaining over 4%.

Luxury stocks also outperformed, with the S&P Global Luxury Index up by 2.41%, beating the S&P 500 Index’s 0.25% gain. This reflects strong demand for luxury goods, which is directly linked to China’s consumption trends.

Singapore and Malaysia Investors: Is Now the Right Time to Invest in Chinese Stocks?

For Singaporean and Malaysian investors, the recent policy boost offers a significant opportunity to tap into undervalued Chinese concept stocks. The market surge presents a short-term rebound, but there are long-term opportunities as well. As global central banks, including the Fed, continue their rate-cutting strategies, investor sentiment towards Chinese assets is expected to remain positive.

However, HSBC and Goldman Sachs caution that while the current policies are a positive step, further fiscal measures will be necessary to ensure sustainable growth. HSBC expects more fiscal stimulus, including the issuance of special national bonds, to support China's economic trajectory.

Key Takeaways for Singapore and Malaysia Investors

• Chinese stocks have surged following China’s largest economic stimulus package since the pandemic.

• Kanzhun (BZ.US), Bilibili (BILI.US), JD.com (JD.US), and others saw significant gains, reflecting growing global optimism.

• ETFs and selective stock picking in sectors like technology, consumer goods, and banking offer key opportunities for investment.

• China’s commodity consumption and luxury market are also benefiting from the stimulus, with strong gains in both sectors.

• Singapore and Malaysian investors should consider this an opportune time to allocate assets to Chinese stocks as liquidity and investor confidence returns.

*For Malaysia-eligible clients, 0 commission is for 180 days only. Full T&Cs and other fees apply. The stocks shown are for illustrative purposes only. Investments involve risk. Full disclaimers at https://www.moomoo.com/my/support/topic9_37. This advertisement has not been reviewed by the SC. Past performance is not indicative of future performance. For Singapore-eligible clients,  full T&Cs and other fees apply. Investments involve risk, this advertiseent has not been reviewed by the Monetary Authority of Singapore. Please click Advertisement Disclaimer-moomoo Help Center for full disclaimers.All logos and brands referenced are for identification purposes only and remain the property of their respective owners and do not represent endorsements of any kind.