KraneShares CapitalVue Weekly

ETF Trends

Krane Funds Advisors is the advisor to the KraneShares CSI Five Year Plan ETF and the KraneShares CSI China Internet ETF. Enclosed is a weekly update of China’s economic and capital markets activity that was assembled by KraneShares and its Shanghai based partner, CapitalVue. Please contact us if you have any questions or comments.

Major News and Events

Alibaba Announces Major Logistics Joint Venture: In a major push into the logistics business, the Chinese e-commerce giant Alibaba Group said on Monday that it would invest around $360 million in the Haier Group, one of China’s biggest manufacturers and distributors of household appliances. The deal calls for the two companies to set up a joint-venture logistics business, bringing together Alibaba’s huge online retailing platform and client network with Haier’s logistics unit, Goodaymart, which has an especially strong presence in China’s smaller inland cities and provinces.

Haier, also sold a 10 percent stake in itself to the private equity firm Kohlberg Kravis Roberts & Company, this past September.

China Retail Sales Soar: China released a string of economic data that showed retail sales came in much higher than expectations for November. Retail sales climbed 13.7% year-over-year in November, from 13.3% in October. In real terms it surged to 11.8% on the year, from 11.2% the previous month. The number was largely driven by sales of goods.

The jump in retail sales is being attributed to huge “online sales on China’s Singles’ Day (November 11) – the equivalent of Cyber Monday in the US,” according to Societe Generale. Bank of America also pointed out that retail stores offered strong discounts at the time to compete with online retailers. Chinese consumers spent a record $5.7 billion in sales at Alibaba, China’s largest e-commerce company. This compares with $1.9 billion that American consumers spent online overall during Black Friday.

Breakdown of retail sales:

•Home appliance sales ticked up to 24.8% in November, from 20.6% the previous month.

•Home electronic sales surged 19.6% in November, compared with 12.5% the previous month.

•Food and beverage sales ticked up 14.1%, from 13.7%

•Gold/jewelry sales were up 14.8% in November, compared with 14% the previous month.

•Sales of autos in value terms, slowed to 11.6% on the year, from 14.2%.

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