Chinese stocks surge with massive stimulus: Weekly Recap

I’ve been writing about T-bills for nearly two years. And this week marked a significant moment—the 6-month T-bill yield dipped below 3% for the first time since September 2022. It’s no wonder investors are showing less interest in T-bills right now.

As T-bill yields have dropped, the best fixed deposit rates in Singapore have also been lowered. This has led many to ask: how can we earn a higher yield, especially if interest rates continue to fall?

We’ve talked a lot about Singapore REITs and if you're looking for the best options, our REITs screener tool is a great place to start.

But this week, we’re turning our attention to bond funds—an option for those looking to generate income through a diversified portfolio of bonds. If you’re wondering where to begin, check out our guide on choosing the best bond fund in Singapore.

Beyond bonds, Chinese stocks have been rallying following a series of government stimulus measures. We’ll be looking at how Chinese ETFs can offer exposure to the renewed optimism in their stock market.

With US stocks and gold prices reaching all-time highs, Singapore stocks hitting multi-year peaks, and Chinese markets joining the rally, there’s an undeniable sense of excitement among many investors I’ve spoken with. 

In times like this, it’s easy to fall into the trap of FOMO (fear of missing out). I’m making sure to remind myself to keep emotions in check and stay diligent in my research before making any investment decisions. I hope you do too!

Happy growing!

Gerald, Founder of Beansprout

⏰ This Week In Markets

🚀 Chinese stocks soar

What happened? 

The Chinese government announced a slew of stimulus measures to boost the Chinese economy. 

The People’s Bank of China (PBOC) cut its reserve requirement ratio by 50 basis points for most banks. 

Chinese officials also committed to stabilise the country’s property market and make real estate prices “stop declining,” according to state media. 

The Chinese government also announced a one-off cash handout to those living in extreme poverty.

What does this mean?

Taken together, the measures were seen as a sign that the Chinese government is aiming to meet its economic growth target of 5% for the year.

This is done through stabilising the property sector crisis, boosting domestic consumption, and support the stock market. 

Why should I care? 

The CSI 300 index of Shanghai- and Shenzhen-listed companies rose 15.7% for the week, the largest weekly gain since November 2008. 

Global stocks leveraged to Chinese economic growth, including European luxury goods stocks and commodity stocks, also bounced. 

In the Singapore market, REITs with significant exposure to China saw sizeable gains. Read our REIT weekly review to find out which REITs fared the best. 

To find out how to gain exposure to China, check out our guide to China ETFs. 

🚗  Moving This Week

• DBS is increasing ownership in its China securities joint venture to 91%, from 51% currently, through acquiring the stakes of four Chinese shareholders.
• ST Engineering opened a new yard at Gul Road to replace its existing Tuas Yard. The new yard is twice the size of its existing capacity.
• CapitaLand Integrated Commercial Trust (CICT) received valid acceptances of 82 per cent at the close of its preferential offering on 24 Sep. The REIT received valid acceptances of 309.5 million new units and excess applications of 183 million units. A total of 377.3 million new units will be issued to raise gross proceeds of about S$757.2 million. The preferential offering units are expected to be listed on the SGX on 2 Oct.
• Thai Beverage completed the share swap with TCC Assets. Thai Beverage now owns 69.9% of F&N. TCC Assets’ stake in Frasers Property is raised to 86.9%. It will retain a 17.6% stake in F&N. TCC Assets own a 56.8% stake in Thai Bev.
• DFI Retail Group has proposed to divest its holdings of 1.9bn shares in Yonghui Superstores for RMB4.5bn to a subsidiary of MINISO Group.

Source: Bloomberg, CNBC, Business Times, Edge Singapore

💡 The big important story

Complete Guide to Bond Funds in Singapore

Looking to invest in bond funds in Singapore? We share how you can choose the best bond fund for your portfolio.

🤓 What we're looking out for next week

• Monday, 30 Sep: China Purchasing Managers Index (PMI) data
• Tuesday, 1 Oct: Singapore Savings Bond application open date, Nike earnings
• Friday, 4 Oct: US Nonfarm Payroll data

Check out the full list of Singapore stocks, REITs and ETFs with upcoming dividend payments with our dividend calendar.

Source: SGX, Bloomberg, Refinitiv

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