1. China’s economic growth slows, but remains within expected range

China released its 2nd quarter GDP results at 6.2%. The 6.2% was its weakest in almost 30-years, but given the current landscape, it was within estimates. Markets recovered the same day the data was released as underlying data points showed signs of improvement.

While concerns that the US-China trade war has impacted the economic giant, China’s consumption sector remained a bright spark amid the murmurs. The sector contributed 60.1% to the economic expansion within the 1st half of the year, inline with the country continued shift from a manufacturing- centric economy towards one that focuses on consumption driven growth.

Table 1: Data points signals growth in June 2019

Data Point Reading in May (YoY%) Reading in June (YoY%) Growth (%) Polling Estimates (%)
Industrial Production 5.0 6.3 1.3 5.2
Retail Sales 8.6 9.8 1.2 8.3

Source: Bloomberg as at 15 July 2019.


2. Markets bounced back, with consumption sector taking the lead

Investors’ sentiment improved after data points were released within expectations, and the equity markets’ performance showed for it. While broader markets had inched higher before the day close, the S&P New China Sector ex A Share Index topped the table as consumption-related stocks enjoyed a stronger climb.

• S&P New China Sectors Ex A Share Index : + 0.66%
• Hang Seng China Enterprises Index : + 0.21%
• Shanghai Shenzhen CSI 300 Index : + 0.21%
• Shanghai Composite Index : + 0.20%
• FTSE China 50 Index : + 0.08%

Source: Bloomberg as at 15 July 2019. All returns quoted in MYR terms.


3. China’s e-commerce story continues

Alibaba Group Holdings Ltd, the US-listed e-commerce giant from China stole the limelight, jumping 2.62% in USD terms for the day.

Another strong gainer in the list of top holdings within the S&P New China Sectors Ex A Share Index is Tencent Holdings Ltd. The Hong Kong-listed  China tech giant spiked 1.63% in HKD in the day after China released its data points.

Source: Bloomberg as at 15 July 2019. All returns quoted in local currency terms.


4. Gaining access to China’s resilient consumption sector

Name of ETF TradePlus S&P New China Tracker
Listed Market Bursa Malaysia Securities
Stock Code 0829EA
Minimum Trading Units 100 Units
Closing Price (15 July 2019) MYR 5.66 per Unit
No. of Constituents 72 stocks
Management Fee 0.50% per annum
Sales Charge Nil
12mths Price / Earnings * 33.14
12mths Price / Book Value * 22.64
12mths Dividend Yields * 1.36

* The 12months’ Price/Earnings, Price/Book Value, and Dividend Yields financial ratios have been sourced from
Bloomberg for the S&P New China Sectors Ex A Share Index, which is the benchmark used by the TradePlus S&P New China Tracker.

Data is for 12-months for the period ending 15 July 2019.


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