The Direxion Daily FTSE China Bull 3X Shares (YINN) ETF, which provides leveraged exposure to Chinese equities, soared over 8% in pre-market trading on October 10, 2024. The sharp upward movement was fueled by renewed investor enthusiasm towards Chinese stocks and ETFs after the People's Bank of China (PBOC) unveiled a funding scheme aimed at supporting the capital markets.
On Thursday, the PBOC announced that it would start accepting applications from financial institutions to join a newly created 500 billion yuan ($70.62 billion) funding scheme. The program allows eligible securities firms, fund companies, and insurers to use their assets, including bonds, stock ETFs, and holdings in the CSI 300 Index, as collateral in exchange for highly liquid assets like treasury bonds and central bank bills. This move provides easier access to funding for these institutions to buy more stocks, effectively boosting market liquidity and investor confidence.
Reacting positively to the PBOC's supportive measures, Chinese ADRs and ETFs, including YINN, surged in overnight and pre-market trading. Alongside YINN's 8.28% pre-market gain, other China-focused ADRs and ETFs like XPeng (XPEV), Trip.com (TCOM), Alibaba (BABA), and PDD Holdings (PDD) also saw significant pre-market gains, reflecting the broader optimism towards Chinese equities.
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