U.S.-listed Chinese internet and electric vehicle shares are rallying sharply again in premarket trading on Monday amid reports that Chinese officials are easing pandemic restrictions.
China is easing some of the world’s strictest anti-virus controls, and authorities say the new variants are weaker. On Monday, passengers in Beijing and at least 16 other cities were allowed to board buses and subways without testing for the virus in the previous 48 hours for the first time in months. Industrial hubs including Guangzhou near Hong Kong have reopened markets and businesses, lifting most travel restrictions while maintaining restrictions on businesses residential areas with infected people.
Hopes of reopening the country’s economy helped send US-listed shares of Alibaba Group Holding Ltd.
posted its biggest monthly gain in seven years in November, while the Golden Dragon China ETF
enjoyed its biggest monthly gain since September 2007.
Among the big gainers ahead of Monday’s premarket was the US-listed stock of Bilibili Inc.
up 16.8%, iQiyi Inc.
up 8.7%, Huya Inc.
increased 6.1%, and Baidu Inc.
up 4.9%. U.S. custody shares of Alibaba and JD.com Inc.
both increased by 4.8%.
U.S.-listed shares of Chinese electric vehicle companies joined the strong pre-market rally on Monday, with Nio Inc.
up 8.0%, XPeng Inc.
up 14.9%, and Li Auto Inc.
increased by 5.6%.
China’s easing of COVID-19 regulations could also benefit American companies. For example, Apple Inc. warned that production disruptions in China could affect iPhone 14 Pro shipments in the current quarter, and analysts are wondering how that momentum will play out during the key sales season. on holiday and into next year.
The Wall Street Journal news on the weekend Apple has “accelerated plans” to move some of its production outside of China, to India and Vietnam.
“The shift away from China will not be easy and [will] Wedbush analyst Daniel Ives wrote in a Sunday note to clients.