China internet ETF skyrockets 40% amid record trade volumes

China technology map. Modern data communication concept. Computer Science and Technology in China.

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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 experienced all-time record trade volumes.

The move came on signs of reforms in the rules Chinese authorities use to oversee the release of audit information for U.S.-listed companies from China.

On the day, KWEB saw just shy of 100M shares exchange hands -- about five times its daily average of 19M shares. In total, KWEB's trade volume equaled 97.89M shares, which equated to roughly $2.6B in trade value.

The ETF drew dramatic interest as Beijing authorities aimed to provide concessions that will support the disclosure of Chinese audit information to U.S. regulators.

According to the Financial Times, China plans to institute a "red light, green light" system for businesses and auditors concerning what specific information can be disclosed abroad.

While nothing has been formally approved, the move could mark a crucial step forward after the unpredictable regulatory environment that has seized Chinese stocks over the past year.

John Zoldis, president Quo Vadis Capital, told the FT that a greater transparency for U.S. 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 led all ETFs on Wednesday, it was not the only fund that took off from the news out of China. Below are other Chinese based ETFs that experienced strong topside moves:

ETFs: (NASDAQ:PGJ) +33.4%, (NYSEARCA:KTEC) +31.9%, (NASDAQ:EWEB) +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 keep the Chinese stock market in check and support IPOs abroad. As the state-run Xinhua News Agency said: "The Chinese government continues to support various types of companies to list overseas."

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