Consumers are starting to fire up China’s economy, ETF experts find
China’s economy is showing signs of recovery as consumers start to spend more, according to Brendan Ahern, the Chief Investment Officer at KraneShares. However, Ahern cautioned that the rebound is not “like turning on a light switch.” As per the National Bureau of Statistics of China, retail sales have been increasing since November 2022.
Ahern, who is involved with the company’s China-focused ETFs, expects Chinese companies’ quarterly earnings to improve with each consecutive quarter. His forecast may already be unfolding as tech giants Baidu and Tencent beat revenue expectations for the fiscal first quarter of 2023. Meanwhile, Alibaba missed revenue estimates. Ahern reports that “we’re actually hearing that for many of the companies… in the management calls, they’re speaking to how Q2 already is outpacing Q1, which outpaced Q4 of last year.”
The airline industry in Asia is also likely to benefit from Chinese consumers’ increased spending. Singapore Airlines, All Nippon Airways, and Japan Airlines have all cited demand from China as a factor in future earnings. In a special interview with CNBC, Will Rhind, the CEO of ETF provider GraniteShares, expects international travel from China to rebound later this summer following a sluggish start to domestic travel reopening. Rhind believes the recent COVID surge won’t affect the reopening’s trajectory, adding past lockdowns seen across China are “very, very much unlikely to be repeated.”
FAQs:
1. What is Brendan Ahern’s role at KraneShares?
– Brendan Ahern is the Chief Investment Officer at KraneShares.
2. What has been happening with China’s retail sales?
– According to the National Bureau of Statistics of China, retail sales have been increasing since November 2022.
3. Which companies saw better-than-expected revenue for Q1 2023 in China?
– Tech giants Baidu and Tencent both beat revenue expectations for the fiscal first quarter of 2023, while Alibaba missed revenue estimates.
4. Which industries are likely to benefit from increased spending by Chinese consumers?
– The airline industry in Asia is likely to benefit from increased spending by Chinese consumers.
5. When does Will Rhind expect international travel from China to rebound?
– Will Rhind expects international travel from China to rebound later this summer.
According to ETF experts, Chinese economy is being bolstered by the increasing contribution of consumers.
China’s economy is showing signs of recovery as consumers start to spend more money, according to Brendan Ahern, the chief investment officer at KraneShares. Although it’s not as simple as flicking a switch, Ahern noted that retail sales have been on the rise since November 2022, as reported by the National Bureau of Statistics of China. Ahern, who is mainly involved with the firm’s China-focused exchange-traded funds (ETFs), predicts that earnings for Chinese firms will improve in each consecutive quarter. His prediction seems to be already materializing as tech giants Baidu and Tencent beat revenue expectations for Q1 2023. However, Alibaba missed its mark. Ahern notes that in management calls, many companies have reported Q2 outpacing Q1, which outperformed Q4 2022. China’s reopening is also seen as having a positive effect on the airline industry, with companies such as Singapore Airlines, All Nippon Airways, and Japan Airlines all reporting demand from China as a reason for future earnings growth. GraniteShares’ CEO Will Rhind agrees with Ahern’s growth prediction, saying that domestic travel is rebounding, but international travel may take a little longer. Rhind predicts that international travel from China will start to rebound this summer. Though a recent Covid surge has caused concerns, Rhind believes that previous lockdowns seen across China are unlikely to happen again.