• The CSI 300 Index and FTSE China A50 Index averaged 7.0% SGD total returns for the 2024 year through to 7 June. The FTSE China A50 Index Futures have also attracted new positions this year, with open interest recovering 24% from Sep 2023 lows, through to the end of May 2024.
   
• CSRC market stabilisation measures have contributed to a gradual but a broad improvement in the China stockmarket sentiment, while investment in strategic manufacturing industries is expected to benefit renewed government support and trade-in programs. 
   
• More than 100 Singapore stocks reported at least one-tenth of their recent FY revenue to China. A sub-segment of this group of 100 stocks that averaged total returns in-line with the CSI 300 and FTSE China A50 Index, was comprised of the 20 stocks that booked the highest net institutional inflow over the 23 weeks. 
   

Two key China stockmarket benchmarks, the CSI 300 Index and FTSE China A50 Index, have averaged 7.0% SGD total returns in the 2024 year through to 7 June. This compares to respective 2.6% and 5.6% total returns for the FTSE All-Share ASEAN Index and the Straits Times Index. 

CSRC market stabilisation measures under the new leadership of Chairman Wu Ching have contributed to a gradual but broad improvement in the China stockmarket sentiment, with the FTSE China A50 Index gaining 13% from the end of January through to the end of May. Over the four-month period, the FTSE China A50 Index saw 9 gainers for every one decliner. This is compared to the final two months of 2022, when the FTSE China A50 Index gained 15%, with just 2 gainers for every 1 decliner. The SGX FTSE China A50 Index Futures have also attracted new positions, with contract open interest recovering 24% in contract terms, from Sep 2023 lows through to the end of May 2024. The SGX FTSE China A50 Index Futures open interest reached its highest levels in May since January 2023, at US$12.3 billion. At the same time, trading activity has been observed to increase not just in the spot month, but also in the far month contracts.  

Recent Economic Developments
As reported in mid-April, China 1Q24 GDP growth clocked 5.3% in 1Q24, a marginal acceleration from 5.2% in 4Q23, which coincided with multiple international banks re-rating China stocks higher into early May.

As detailed in the external outlook of Singapore’s 1Q24 GDP Report, China's GDP growth in 2024 is projected to be stronger than previously estimated. The Ministry of Trade and Industry detailed that this optimistic outlook is supported by three key various government measures aimed at bolstering the economy: 

• Investment in strategic manufacturing industries is expected to benefit renewed government support and trade-in programs. 
• Additionally, infrastructure investment is anticipated to receive a significant boost from government spending. 
• The property market is also expected to stabilise, thanks to newly announced support measures, which could contribute to a modest recovery in consumption later in the year. 

The ‘trade-in programs’ are seen as multi-year initiatives, aligned with the new productive quality forces push that targets key industries, promoting the adoption of advanced technologies and sustainable practices. The emphasis on digital and green development, alongside the trade-in of consumer goods, is expected to substantially boost domestic demand. This strategic approach not only helps to foster modernisation but also supports environmental sustainability through enhanced recycling processes. UOB Economists have cited reports that in the durable consumer goods segment, the upgrading of cars and home appliances is estimated to boost demand by more than RMB 1 trillion and the recycling of old equipment and used consumer goods are worth another RMB 4 trillion in output value. For context, China GDP in 2023 amounted to RMB ~126 trillion. 

Singapore also lists more than 100 stocks that recently reported more than one-tenth of their revenue to China. This segment of the Singapore stock market has been mixed in the 2024 year through to 7 June, with S$200 million net institutional inflow led by inflow to the Industrials Sector. The 20 stocks within the group of more than 100 stocks that booked the highest net institutional inflow for the first 23 weeks of 2024 are tabled below. 

These 20 stocks generated median total returns of 8.4% over the period, in-line with the SGD total returns of the FTSE China A50 Index at 9.0% and CSI 300 Index return at 5.1%.   

Note ADT refers to average daily turnover, NIF refers to Net Institutional Inflow, TR refers to Total Return. Geographical revenue is sourced from Company Reports 

All Data as of 7 June, 2024 Source: SGX, Refinitiv, Bloomberg.

At the same time the 20 stocks with more than one-tenth of their recent reported to China, that booked the highest net institutional outflow for the first 23 weeks of 2024 generated median 10.1% decline in total return over the period. Among these 20 stocks, CapitaLand China Trust, Wilmar International, Nanofilm Technologies International, Hutchison Port Holdings Trust and NIO Inc booked the highest net institutional outflow. 

Singapore Lists 10 China Stockmarket Focused ETFs

Singapore also lists 10 China-focused ETFs that cover a broad span of stock indices, providing thematic and sectoral exposure, enabling for tactical investment strategies for both broad China exposure and specific sectors. Among the 10 ETFs, the Lion-OCBC Securities Hang Seng Tech ETF maintains the highest Assets Under Management (AUM) and Average Daily Traded value (ADT). While this ETF has gained 2.3% over the past 23 weeks, its tradability is evident through averaging 3% daily trading ranges over the past 23 weeks. 

The hyperlinks below provide more details on each ETF.

• Lion-OCBC Securities Hang Seng TECH ETF
• Xtrackers MSCI China UCITS ETF
• Phillip-China Universal MSCI China A 50 Connect ETF
• United SSE 50 China ETF
• Lion-OCBC Securities China Leaders ETF
• UOBAM Ping AN ChiNext ETF
• NikkoAM-StraitsTrading MSCI China Electric Vehicles And Future Mobility ETF
• CGS Fullgoal CSI 1000 ETF
• CSOP Huatai-Pinebridge SSE Dividend Index ETF
• CSOP CSI STAR and ChiNext 50 Index ETF
   

Further Resources and Research 

• Specified Investment Products (SIPs):  SIP Online Module
• ETFs: Screener |Product Information
• SGX FTSE China A50 Index Futures: Product Information 
• Weekly Fund Flow Report: Data Reports - Singapore Exchange (SGX) 
   

Recent Financial Results/Business Updates

• Yangzijiang Shipbuilding: Yangzijiang Shipbuilding 1QY2024 Business Update | Yangzijiang Shipbuilding Annual Report FY2023
• HongkongLand: Hongkong Land Holdings Annual Report 2023 
• Geo Energy Resources: Geo Energy Resources Annual Report 2023 
• Tianjin Pharmaceutical Da Ren Tang: Tianjin Pharmaceutical Da Ren Tang Group Corporation Annual Report 2023
• Best World International: Best World International Annual Report FY2023
   

Related Analyst Reports

• Yangzijiang Shipbuilding: CGS-CIMB - Yangzijiang Shipbuilding update : “Clean”-ing up the orderbook | DBS - Yangzijiang Shipbuilding update : Making New Highs
• HongkongLand: DBS - Hongkong Land update : Strong embedded value
• Geo Energy Resources: KGI Securities (Singapore) - Geo Energy Resources Update: A good time to enter | 
  KGI Securities (Singapore) - Geo Energy Resources Initiation: Stepping up production and securing growth 
   

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