China 3x Bull ETF Surges 16%! Is it Time to Go All-In on Chinese Concept Stocks?

A-shares and Hong Kong stocks surged today, with the Shanghai Composite Index and the Hang Seng Index both rising over 4%, and the FTSE China A50 Index soaring over 5%.

Ahead of the U.S. market opening, popular Chinese concept stocks generally surged. Pinduoduo rose 4%, Alibaba jumped 5%, NetEase surged nearly 6%, JD.com climbed 7%, and Li Auto, NIO, and XPeng all increased by about 7%.

Additionally, the FTSE China 3x Bull ETF (YINN) surged over 16% pre-market, while the Direxion Daily FTSE China Bull 2x Shares (CWEB) jumped over 10%.

On the news front, multiple major policy benefits were announced today, and the market expects the policy measures to be further expanded.

The State Council Information Office held a press conference on financial support for high-quality economic development. Central Bank Governor Pan Gongsheng announced a package of broad monetary, real estate stabilization, and economic stabilization policies, exceeding market expectations.

The package of policies is as follows:

Cut the reserve requirement ratio (RRR) by 50 basis points, providing long-term liquidity of 1 trillion yuan. Depending on market liquidity conditions, further cuts of 25-50 basis points may be made in the future.

Lower the policy rate, reducing the 7-day reverse repo operation rate by 20 basis points from 1.7% to 1.5%, guiding the Loan Prime Rate (LPR) and deposit rates to decline simultaneously, and maintaining a stable net interest margin.

Reduce existing mortgage rates to the level of new issuances, with an average reduction of 50 basis points.

Unify the down payment ratio for first and second homes, reducing the down payment ratio for second homes from 25% to 15%.

Increase the support ratio of the 300 billion yuan housing re-loan issued in May from 60% to 100%, enhancing market-based incentives.

Extend the policies on operational property loans and the 16 financial policies until the end of 2026.

Create a swap facility tool for securities, fund, and insurance companies, allowing institutions to pledge assets to the central bank to obtain liquidity, thus improving their ability to access funds and increase stock holdings.

Establish a special re-loan for stock repurchases and holdings, guiding banks to provide loans to listed companies to support stock repurchases and holdings.