• Fri. Dec 1st, 2023

Chinese Tech Stocks on Brink of Bull Market: Early Signs of Growth


Nov 20, 2023

Beijing Stock Exchange 50 Index is seeing a bull market sign despite the broader downturn in China’s local equities. The index, which tracks early-stage innovative companies listed in the capital, rose by 3.1% on Monday, gaining over 19% since October. This outperformance has surpassed its larger, tech-heavy peer by 12 percentage points and the benchmark CSI 300 Index by 16 percentage points.

The strong rebound on the Beijing board can be attributed to several factors, including the wider fluctuation range of up to 30% allowed for its constituents compared to a maximum of 20% for the Shanghai and Shenzhen gauges. Additionally, investors’ light positioning in these companies and regulators’ consideration to include eligible securities into the CSI cross-market index system have also contributed to this growth.

Despite being launched only two years ago, the Beijing exchange was created with the intention of helping small firms raise funds and diversify China’s financial markets. The largest of around a dozen exchange-traded funds tracking the index have assets of about 228.8 million yuan ($31.9 million), indicating moderate investment compared to other options available in China’s financial markets.

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