Broader market proxies on the Singapore Exchange include the Lion-OCBC Securities China Leaders ETF, the UETF SSE 50 ETF and the Xtrackers MSCI China ETF.
ETFs are meant to replicate the movement of the indices they track as closely as possible but bear in mind ETFs have expense ratios, which could temper the upside.
Technically, the China Leaders ETF has just broken above the several times tested $1.78 level, indicating an initial upside of $1.95, and a further upside of $2.04. The breakout level of $1.78 is a support/stop loss level.
The China Leaders ETF replicates the movement of the 80 largest mainland stocks by market capitalisation listed on the Hong Kong, Shanghai and Shenzhen Exchanges. These are likely to be Tencent (8.2%), Kweichow Moutai (4.66%), China Construction Bank (4.66%), Contemporary Amperex Technology (3%), China Merchants Bank (2.67%), Ping An Insureance (2.67%), ICBC (2.14%), Alibaba Group Holding (2.1%) and JD.com (2%).
See also: S-REITs could finally rally as corrective phase sets in for mainland stocks
The Lion-OCBC Securities Hang Seng Tech Index ETF (HSTECH) has established resistance at $1 or thereabouts. Prices are consolidating around this level, within a 5% range, which is normal. The consolidation may persist for another week as rotational interest moves to laggards. The eventual upside could be as high as $1.22, which is the target from the one-year base formation.
The top six stocks by weightage in the Hang Seng Tech Index are Xiaomi, JD.com, Alibaba, Tencent, SMIC and Meituan.
See also: Investors on DeepSpeed to China with HSTECH
Our own Straits Times Index (STI) has been unable to clear 4,000 convincingly and is in a consolidation phase. The STI has also been buffeted by global markets, especially US markets, which may have entered a more severe corrective phase.
The STI's consolidation should enable the index to build a base from which it can challenge the 4,000 resistance level.
