The CSI 300 is a capitalization-weighted stock market index designed to replicate the performance of the top 300 stocks traded on the Shanghai Stock Exchange and the Shenzhen Stock Exchange. It has two sub-indexes: the CSI 100 Index and the CSI 200 Index.
The CSI 300 consumer sector could be offering an excellent place to invest for Chinese equity investors. Consumer companies should also gain from a recovering Chinese economy which is set to grow 8% this year from the COVID impacted 2020. The profit growth in the sector is standing out and the CSI 300’s EPS growth has been lower than the GDP expansion over the last 10 years. The future looks good too as, according to Morgan Stanley analysis, China’s private consumption is set to more than double to hit $12.7 trillion.
If you take a look at the chart below you can see the earnings per share (EPS) line in the blue for the consumer sector. Notice how it outpaces the earnings per share of the index as a whole and the GDP of China. It stands to reason that China’s economy becomes stronger in the consumer sector as a step in its advancement. Looks like a good area to invest in for the medium term.
Alibaba set for gains over the medium term?
Alibaba Group Holding Limited, also known as Alibaba Group and as Alibaba.com, is a Chinese multinational technology company specializing in e-commerce, retail, Internet, and technology. This could be a company that gains from strong growth in China’s consumer sector and online gains seen during the COVID pandemic. JD.com is also worth a look.