US-Listed Chinese Stocks Soar on Reopening Hopes, Tech Audit
The KraneShares CSI China Internet Fund, an exchange-traded fund holding more than 40 Chinese stocks, soared 7.4%.
(Bloomberg) -- US-listed Chinese stocks jumped on Friday as fresh optimism over an easing of Covid restrictions and progress in the US audit inspection of Chinese companies fueled appetite for beaten-down names.
The KraneShares CSI China Internet Fund, an exchange-traded fund holding more than 40 Chinese stocks, soared 7.4%. Shares of internet giants Alibaba Group Holdings Ltd. JD.com Inc., Baidu Inc. and Pinduoduo Inc. climbed more than 8.5% each in US premarket trading, while electric vehicle stocks NIO Inc. and Li Auto Inc. advanced 9.2% and 12%, respectively.
These moves tracked a frenzied rally in their Hong Kong traded peers, which drove the Hang Seng China Enterprise Index to its best weekly gain since 2015, after a steep drop the week before.
The big reversal in China stocks follows days of speculation on the back of unverified social media posts that the country is preparing to ease its strict Covid Zero policy. What’s more, Bloomberg reported that China is working on plans to end a system that penalizes airlines for bringing virus cases into the country, while German Chancellor said China agrees to make BioNTech SE’s Covid-19 vaccine available to foreign residents, the first approval of mRNA vaccine in the country.
“Some easing has already taken place and more such measures are likely in the coming months,” said Adam Crisafulli, founder of Vital Knowledge. “Also keep in mind what’s happened to Chinese/HK stocks – these are some of the most hated, oversold, unowned equities on the planet – this is playing as much a role in the surge as reopening hopes.”
Meanwhile, US audit officials completed their first on-site inspection round of Chinese companies ahead of schedule, Bloomberg News reported, offering investors a much needed sign of progress in the closely watched process to prevent the delisting of hundreds of stocks from American exchanges.
READ: US Audit Inspectors Finish On-Site China Work Ahead of Plan (1)
The Nasdaq Golden Dragon Index of 65 Chinese stocks has climbed for the past three sessions and is up 7.5% on the week, rebounding after closing at its lowest level since 2013 last week in a record selloff amid worries over President Xi Jinping’s tightening control.
Still, some fund managers remain cautious about the nation’s equities. Tiger Global Management, a long-time investor in China, has pulled back from the region and is pausing future stock investments, on concern that geopolitical tensions and China’s Zero Covid policy are all the more likely to persist after President Xi Jinping tightened his grip on power.
--With assistance from .
(Updates chart, adds Hong Kong and Chinese trading in the third and penultimate paragraphs, Tiger Global Management in the last.)
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