As the closing bell rang on Wednesday, the KraneShares CSI China Internet ETF (NYSEARCA: KWEB) led all exchange-traded funds, exploding +39.4% on the session. At the same time, KWEB recorded all-time record trading volumes.
The move came on the back of signs of reform in the rules Chinese authorities use to oversee the release of audit information for Chinese companies listed in the United States.
On that day, KWEB saw just under 100 million shares traded, about five times its daily average of 19 million shares. In total, KWEB’s trading volume was equivalent to 97.89 million shares, which equates to approximately $2.6 billion in trade value.
The ETF has attracted considerable interest as authorities in Beijing seek to grant concessions that would support the disclosure of Chinese audit information to US regulators.
According to FinancialTimesChina plans to institute a “red light, green light” system for companies and auditors regarding specific information that can be disclosed overseas.
Although nothing has been officially approved, the move could mark a crucial step after the unpredictable regulatory environment that has gripped Chinese stocks over the past year.
John Zoldis, chairman of Quo Vadis Capital, told the FT that greater transparency for US auditors would “improve investor confidence in US-listed Chinese companies”.
KWEB is now -14.8% in 2022, a marked improvement from Tuesday’s close where the ETF was down 39.3% YTD.
While KWEB topped all ETFs on Wednesday, it wasn’t the only fund that took off on news from China. Below are other China-based ETFs that have seen strong gains:
AND F : (NASDAQ:PGJ) +33.4%, (NYSEARCA: KTEC) +31.9%, (NASDAQ: WEEB) +28%, (NYSEARCA:CHIQ) +26.4%, (NYSEARCA: CQQQ) +25.6%, (NYSEARCA: EMQQ) +24.4%, (NASDAQ: CXSE) +21.4%, (NYSEARCA: FXI) +21.2%, (NASDAQ:MCHI) +20.9%, (NYSEARCA: GXC) +19.9%, (NYSEARCA:FLCH) +14.6%, (NYSEARCA: KGRN) +18.1%and (NYSEARCA:CN) +12.8%.
Beijing pledged its support to control China’s stock market and support overseas IPOs. As the official Xinhua News Agency stated, “The Chinese government continues to support various types of enterprises to register overseas.”