Chinese Consumption Stocks Surge on Policy Optimism, Vouchers

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Chinese Consumption Stocks Surge on Policy Optimism, Vouchers

stock :: 2024-12-12 :: source - bloomberg

By Bloomberg News

(Bloomberg) -- Chinese shares related to consumption surged Thursday amid expectations for more concrete measures from a key economic policy meeting to boost domestic demand.

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Trip.com Group Ltd. and Haidilao International Holding Ltd. rose 4.4% and 3.9%, respectively, helping to push a gauge of Hong Kong-listed Chinese stocks up 1.5%. Options traders also boosted bullish bets on China Mengniu Dairy Co. to a record high.

“The expectation of more specific policy measures to boost consumption during economic work conference, combined with previous stimulus policies, will have a positive impact on the overall market sentiment,” said Shen Meng, a director at boutique investment bank Chanson & Co.

The onshore benchmark of CSI 300 rebounded in a sign that traders were adding back bets on more forceful measures by authorities to prop up a slowing economy. The gains also came after a local media report that major cities including Shanghai and Beijing are launching a new round of voucher program to encourage local consumption before the holidays.

All eyes are now on the ongoing annual Central Economic Work Conference, where more details may emerge later Thursday about policymakers’ strongest pledge in years to revive growth via ramped-up monetary and fiscal easing.

Investors have become increasingly hard to please after several episodes of policy disappointment. A rapid rally in Chinese equities, spurred by Beijing’s stimulus blitz in late September, has lost momentum. While the CSI 300 Index picked up steam after the politburo readout on Monday, the gauge is still more than 5% down from a recent peak.

Besides consumption, investors will be “keen to know how much of a fiscal deficit increase the government is considering,” said Xin-Yao Ng, investment director at abrdn. Any stronger measures to improve the property market and prospects of maintaining gross domestic product growth at 5% will “be good,” he said.

Read: China Signals Bolder Stimulus for Next Year as Trump Returns

(Updates with closing prices in second paragraph, analyst comment in last paragraph)