1Q2019 SNAPSHOT
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1. Markets surge on optimism in US-China trade negotiations
- Investment sentiment improved, leaving investors shifting back into risk assets as US President signals that the negotiations are close to being finalised, stating “epic” trade deal is near completion.
- A deal would be ideal given the scale of trade that is carried out between the 2 countries.
- US Census Bureau reported that goods traded between the 2 countries totalled to US$660 billion in 2018 – US$540 billion in US imports from China, and US$120 billion in US exports to China.
2. Stocks rebound from disappointing earnings
- Disappointing data flowing out of the industrial sector pushed investors into sectors that were comparatively less reliant on the economy – the consumer, and health care sector.
- Good news for China, who is looking to advance to a consumer- driven economy, and already has consumer spending contributing nearly two-thirds of the country’s economic growth.
- China’s tech giant, Tencent, posted weaker than expected 4Q2018 quarterly profits, and slowest profit growth in 13 years.
- Analysts were quick to defend the company, and express a favourable view on the stock, raising its price targets on optimism on the company’s outlook.
- The tech-related sector continued to trend higher, alongside the other consumer-related sectors.
- The 1st quarter saw tech-giants Alibaba, Tencent, and JD.Com all recording strong double-digit gains.
3. Consumption still the performance driver
- Middle-class in China have grown over the decade from 200 million to now 300 million today.
- Group’s spending power could exceed USD28 trillion, overtaking the US (USD 16.8 trillion), and Japan (USD 9.7 trillion) – providing strong catalyst for the consumption sector in China.
- Retail sales rose 8.2% year-on-year in the first 2 months of 2019, with consumption from the rural area climbing 9.1% higher.
- Online retail sales saw a 13.6% jump in the first 2 months of 2019.
- China currently stands as the global leader in e-commerce, and mobile payments. Mobile payments alone amounted to USD24 trillion – 160X that of the US.
How has the Index Performed thus far?
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S&P New China Ex A-Share Index Top Performers & Laggards
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Gaining Access to the Index
- Investors can gain access to the S&P New China Ex A-Share Index through our latest exchange-traded Fund, the TradePlus S&P New China Tracker.
- Listed on the Main Market of Bursa Exchange, investors can trade Units through their brokerage account.
| Name of ETF | TradePlus S&P New China Tracker | |
| Listed Market | Main Market – Bursa Exchange | |
| Total No. of Stocks | 65 | |
| Net Asset Value | HKD 22.3 mil. | |
| Trading Currencies | Malaysian Ringgit | US Dollar |
| Minimum Trading Units | 100 | 100 |
| Stock Code | 0829EA | 0829EB |
| Bloomberg Ticker | CHNMYR MK | CHNUSD MK |
| NAV per Unit (as at 29 March 2019) | MYR 5.7929 | USD 1.4195 |
Snapshot of the TradePlus S&P New China Tracker
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1. Focusing on beneficiaries of consumption spending
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2. Exposure to China’s growth at lower volatility
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3. Gaining exposure in leaders of its industry
| Top Performers | Weighting (%) | 1Q2019 Performance (%) | Sector Categorisation |
| AIA Group Ltd | 10.6 | 20.2 | Financials |
| Alibaba Group Holding Ltd | 10.5 | 33.1 | Healthcare |
| Tencent Holdings Ltd | 9.9 | 15.0 | Communication Services |
| China Mobile Ltd | 7.0 | 6.2 | Communication Services |
| Ping An Insurance (Group) Co of China Ltd | 6.9 | 27.1 | Financials |
| Baidu Inc | 5.7 | 3.9 | Communication Services |
| JD.com Inc | 3.1 | 44.1 | Consumer Discretionary |
| China Life Insurance Co Ltd | 2.5 | 26.8 | Financials |
| NetEase Inc | 2.2 | 2.6 | Communication Services |
| Ctrip.com International Ltd | 2.1 | 61.5 | Consumer Discretionary |
Source: All performance data are sourced from Bloomberg as at 31 March 2019. Performance of indices are quoted in MYR terms,
while other returns are quoted in local currency terms. Sector allocation as per GICS categorisations.
Disclaimer: This article has been prepared by AHAM Asset Management Berhad (“AHAM Capital”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to AHAM Capital and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of AHAM Capital. The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, AHAM Capital makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions. As with any forms of financial products, the financial product mentioned herein (if any) carries with it various risks. Although attempts have been made to disclose all possible risks involved, the financial product may still be subject to inherent risk that may arise beyond our reasonable contemplation. The financial product may be wholly unsuited for you, if you are adverse to the risk arising out of and/or in connection with the financial product. AHAM Capital is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessments of the contents of this presentation, should not treat such content as advice relating to legal, accounting, taxation or investment matters and should consult their own advisers. AHAM Capital and its affiliates may act as a principal and agent in any transaction contemplated by this presentation, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities. Neither AHAM Capital nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (expressed or implied) arising out of, contained in or derived from or any omission from this presentation, except liability under statute that cannot be excluded.
Warning Statement: A Prospectus is available for the TradePlus S&P New China Tracker, and investors have the right to request a copy of it. Investors are advised to read and understand the contents of the Prospectus dated 15 January 2019 before investing. The Prospectus has been registered with the Securities Commission Malaysia, who takes no responsibility for its contents. A copy of the Prospectus can be obtained at Affin Hwang Asset Management Berhad’s sales offices. As with any forms of financial products, the financial product mentioned herein carries with it various risks. Investors are advised to consider the general and specific risks involved as stipulated in its Prospectus before investing. There are also fees and charges involved when investing in the fund, and investors are advised to consider the fees and charges carefully before investing. The price of units and distribution payable, if any, may go down as well as up and past performance of the fund should not be taken as indicative of its future performance.
Licensing Disclosure Statement & Conditions: The "S&P New China Ex A-Shares Index" is a product of S&P Dow Jones Indices LLC, a division of S&P Global, or its affiliates (“SPDJI”) and has been licensed for use by Affin Hwang Asset Management Bhd. Standard & Poor’s® and S&P® are registered trademarks of Standard & Poor’s Financial Services LLC, a division of S&P Global (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Affin Hwang Asset Management Bhd. TradePlus S&P New China Tracker is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, their respective affiliates and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P New China Ex A-Shares Index.
