China’s EV stocks are on a tear


Robust sales reports ease concerns about the global chip shortage and lure investors back into the sector
Newsfeed20 Oct 2021
    Photo credit: AFP Photo


    MAINLAND CHINA & HONG KONG

    Chinese electric vehicle (EV) stocks, led by BYD Co Ltd (1211 HK), emerged as a bright spot in the nation’s lacklustre markets, as robust sales reports ease concerns about the global chip shortage and lure investors back into the sector.

    Shares in the Shenzhen-based EV maker rose eight straight days, the longest streak in a year, before closing slightly lower on Tuesday (19 October). Still, BYD’s 14% rally this month is among the best on the CSI 300 Index, with industry peers Great Wall Motor Co Ltd (2333 HK) and Guangzhou Automobile Group (2238 HK) also among the outperformers. BYD’s Hong Kong-listed stock has gained 16% in October.

    The rebound among EV firms comes after an earlier selloff stoked by uncertainty around chip supplies and China’s crackdown on the technology sector. Meanwhile, the benchmark index has been stuck in a narrow range, hampered by an economic slowdown, property curbs, and worsening power crisis. – Bloomberg News.

    The Hang Seng Index advanced 1.49% to 25,787.21 and the Shanghai Composite Index gained 0.70% to 3,593.15.

     

    REST OF ASIA

    The International Monetary Fund (IMF) cut its growth forecast for the Asia Pacific region due to a surge of the delta variant of Covid and lagging vaccinations.

    The Washington based fund now expects the region to grow 6.5% this year – down 1.1 %pts from its April outlook, but still the world’s fastest growing area. The regional economy is expected to expand 4.9% in 2022, 0.4 %pt higher than the previous forecast.

    “Slower vaccination in Asia is one of the key factors for the slowdown in Asia’s growth momentum this year,” Changyong Rhee, director of the IMF’s Asia and Pacific Department, said in a release.

    Much of the downgrade was due to slower growth in India, which is now forecast to expand 9.5% this year, and Southeast Asia, where the virus continues to wreak havoc. The projection for Japan was cut to 2.4% and Australia’s was lowered to 3.5%, while the outlooks for South Korea and New Zealand were raised to 4.3% and 5.1%, respectively. – Bloomberg News.

    Australia’s S&P/ASX 200 Index climbed 0.98% to 7,447.30 at the open on Wednesday (20 October). It slipped 0.08% to 7,374.90 on Tuesday.

    South Korea’s Kospi Index added 0.16% to 3,033.78 on Wednesday morning. It rose 0.74% to 3,029.04 on Tuesday.

    The Taiwan Stock Exchange Weighted Index jumped 1.17% to 16,900.67.

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