Chinese equities do not appear to have received the memo that debt, demographics and deflation were guarantees of their ultimate demise.
Not only are global investors underweight Chinese equities, short interest in the major US-listed China equity ETFs continues to sit at above average levels relative to history. Don’t try to tell me that is all long/short hedge funds hedging their $BABA longs! The asset is not just ‘under-owned’.
The principal vector for household savings has historically been the real estate market. The high-profile collapse of this market in recent years is almost perfectly mirrored in measures of consumer confidence.
BABA’s 47% year-to-date rally has even left META’s record-breaking share price streak in the dust (there had to be a US large cap tech angle (of course!) namely Alibaba’s AI tie up with Apple!).
Drawdown profile of the 🐿️’s China Consumer basket versus the KWEB (Kraneshares’ popular China Internet ETF)
The ‘National Team’ can be more powerful than any ‘Fed Put’
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