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  • Global X China Consumer Brand ETF’s (the “Fund’s”) investment in equity securities is subject to general market risks, whose value may fluctuate due to various factors, such as changes in investment sentiment, political and economic conditions and issuer-specific factors.
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Further Policy Rollouts to Support Market Rebound

By: Lizzy Liu, Jeff Huang

NDRC to Brief Policy Stimulus Details on 8 Oct Press Conference

The strong China market rally has been bolstered by the significant policy pivot as announced by PBOC and other central government departments, and we could be seeing more concrete supports to the real economy as regulators further rollout details for the policies. Following the policy announcements, Premier Li Qiang promised faster implementation of easing measures on the Sep 29  State Council Meeting, which reaffirms the sense of urgency of Central Government to support the economy, and further elevated market sentiments.

On Oct 8, NDRC will host press conference to brief policy stimulus packages. Though no details have been disclosed, the market is expecting the gradual rollout of Rmb trillions of fiscal packages to support local government financing, bank recapitalization, social welfare and consumption. On Monetary policies, the September Politburo Meeting pledged to conduct further rate cuts, thus we could be expecting further policy rate and RRR cuts to provide more liquidity to the market. In addition, further execution details on the Rmb800bn innovative monetary policy tools to support capital markets announced on Sep 24 could be further catalyst for the market. On Housing policies, we already see relaxation of home purchase restrictions by four tier-1 cities, and concrete progress on central government’s support in buying back developers’ idle land to help home completions should provide more confidence on property market stabilization in China. The policy rollout progress will be gradual, and any concrete progress should be positively received by investors.

Encouraging Preliminary National Holiday Data

The data released so far for Golden Week has been encouraging:

Tourism:

Transportation – During the first 6 days of National Day holiday, total passenger throughput increased by 2.8% YoY, 24% vs 2019. This beat MoT’s expectation of 1.94b domestic trips in total, which implies 0.7% YoY growth and +19.4% vs 2019.

Date Day Passenger
Throughput (mn)
YoY vs 2019
1 Oct 2024 Day 1 331 0.9% 32.8%
2 Oct 2024 Day 2 284 4.1% 15.0%
3 Oct 2024 Day 3 283 4.3% 17.2%
4 Oct 2024 Day 4 284 2.8% 22.6%
5 Oct 2024 Day 5 282 2.2% 33.6%
6 Oct 2024 Day 6 279 5.2% 24.8%
Total 1,743 3.2% 24.1%

Source: Ministry of Transportation, data as of 6 Oct 2024.

Attraction and Lodging – According to Ctrip data, on October 1st, ticket sales for tourist attractions surged by 37% YoY, while hotel bookings increased by 55% YoY. Hotel occupancy rate seems to improve in selected cities, such as Sanya (+13.87ppt YoY to 69.8% during 1-3 Oct), Shanghai (+11ppt YoY to 62.5% during 1-4 Oct). While ADR remains soft, pressure on ADR tends to ease compared to Labor Day and Summer Holiday.

Outbound – National Immigration Administration estimates the average daily cross-border volume to reach 1.75m person times during the Golden Week, up 18.5% YoY and slightly above pre-Covid level.

Consumer trade in:

 According to MOFCOM data, during the first 3 days of the Golden Week, over 1.04m consumers participated in the consumer “trade in” program for major appliances, bringing 1.54m units with sales over Rmb7.3bn (US$1.04b)

Consumption:

Catering – Meituan data shows that in the first five days of the National Day holiday, the average daily value of catering dine-in consumption increased by 33.4% YoY.

Hainan duty free – Per HNNTV.CN, the average daily sales of the 12 Hainan offshore duty-free stores exceeded Rmb150m in the first four days of the Golden Week. This implies that sales recorded Rmb600m+ during 1-4 Oct 2024, vs. Rmb700m+ achieved in the first four days of 2023 Mid-Autumn & National Day Golden Week (29 Sep – 2 Oct 2023), down c.15% YoY. YoY decline

narrowed vs. Labor Day (-38% YoY) and Aug (-33% YoY) with the sequential improvement of daily sales momentum.

Global X Related ETFs1

 

Global X China Consumer Brand ETF 
(2806 HK)
Listing Date 17 Jan 2020
Reference Index Solactive China Consumer Brand Index NTR2
Primary Exchange Hong Kong Stock Exchange
Ongoing Charges Over A Year 0.68% p.a.3
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