Amidst a global rout in technology shares and a worsening Sino-U.S. tech war, China has provided lightning-fast approvals to five different exchange-traded funds, testing investor appetite for chipmakers, new materials producers and machine tool manufacturers, reported Reuters.
The approvals, which took two days instead of the usual weeks, come ahead of the key Communist Party Congress set to be held next month as authorities look to ramp up some battered domestic tech stocks, the report said. Securities regulators have vowed to maintain market stability ahead of the 20th Party Congress, to be held from Oct. 16, it added.
The Funds: Of the five ETFs, two will invest funds into shares of the 50 biggest chipmakers listed on Shanghai’s STAR Market, which include Semiconductor Manufacturing International Corporation and Montage Technology Co.
Two others will invest in the biggest makers of key strategic materials listed on STAR, such as Western Superconducting Technologies Co and Ningbo Ronbay New Energy Technology Co, the report said.
One new ETF will invest in high-end machine tool makers, like Avic Aviation High-technology Co. The fund-raising by the ETFs will conclude next Tuesday.
Shanghai’s tech-focused STAR Market has fallen nearly 30% this year.
Cutting China Reliance: The Biden administration initiated fresh steps in recent weeks to support domestic tech sectors and reduce economic reliance on China. “The whole world has shifted to security-centric from cost-centric,” an EFG Asset Management was quoted as saying.
Price Action: iShares MSCI China ETF MCHI has lost over 29% since the beginning of the year, while the Invesco China Technology ETF CQQQ is down 38%, according to data from Benzinga Pro.
Image and article originally from www.benzinga.com. Read the original article here.