Chinese stocks, including e-commerce majors such as Alibaba (BABA), JD.com (JD), and Baidu (BIDU), got a major boost in trading on Friday as investors digested a fresh stimulus by the Chinese Central Bank. In a major move, the People’s Bank of China injected a record 800 billion yuan ($113 billion) into the banking system.
The Central Bank of China is doing this through an offering to commercial lenders of a net 800 billion yuan ($113 billion) in one-year loans. Moreover, to boost the struggling property market, Beijing and Shanghai have implemented measures such as cutting down-payment ratios and extending mortgage deadlines. Amid disappointing retail sales and falling home prices, there are widespread expectations that China may enact further policy adjustments for economic recovery in 2024.
China’s retail sales increased by 10.1% year-over-year in November, up from a 7.6% rise in October, but were below economists’ expectations of a jump of 12.5%. Meanwhile, China’s property prices continued to be on a downswing, as property prices fell for the fifth consecutive month, down by 0.2% year-over-year in November, while prices for new homes in 70 major Chinese cities dropped 0.4% month-over-month.
Is CNYA a Good ETF to Buy?
The iShares MSCI China A ETF (CNYA) offers a viable option for investors interested in getting exposure to Chinese stocks. However, the CNYA ETF has slid by more than 10% in the past year due to persisting weakness in the Chinese economy. Today’s announcement of the economic stimulus could give a big boost to the Chinese economy in 2024 and, in turn, the performance of China-focused ETFs.
