China stocks outperform ASEAN in the first half

Returns in FTSE All-Share ASEAN Index the Straits Times Index lagged at 2.6% and 5.6%, respectively.

China’s two stock market benchmarks, the CSI 300 Index and FTSE China A50 Index, booked an average total return of 7% in SGD terms for the year ended 7 June amid improving business sentiment, according to a report by the Singapore Exchange (SGX).

That average return surpasses the 2.6% total return for the FTSE All-Share ASEAN Index as well as the 5.6% total return in the Straits Times Index during the same period.

SGX traced the strong showing to China’s overall improvement in its investment environment, coupled with supportive state policies in strategic manufacturing industries.

It said the FTSE China A50 Index gained 13% from the end of January through the end of May, recording nine gainers for every one decliner.

The SGX FTSE China A50 Index Futures also attracted new positions, with contract open interest rebounding 24% in contract terms, from Sep 2023 to the end of May. 

SGX also highlighted the measures rolled out by the China Securities Regulatory Commission (CSRC) to help stabilise the market. 

The improving market conditions were also underpinned by the state’s “trade-in” programs, a multi-year initiative that targets key industries land promotes the adoption of advanced technologies and sustainable practices.

CSI 300 is considered the blue-chip index for mainland China stock exchanges while the FTSE China A50 tracks the performance of the 50 biggest listed companies in the mainland.

China’s economy is projected to grow at a faster pace this year than initially anticipated largely due to investments in strategic manufacturing, infrastructure spending and a recovering property market.