The Run-Down on Chinese Equities

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

Websim is the retail division of Intermonte, the primary intermediary of the Italian stock exchange for institutional investors. Leverage Shares often features in its speculative analysis based on macros/fundamentals. However, the information is published in Italian. To provide better information for our non-Italian investors, we bring to you a quick translation of the analysis they present to Italian retail investors. To ensure rapid delivery, text in the charts will not be translated. The views expressed here are of Websim. Leverage Shares in no way endorses these views. If you are unsure about the suitability of an investment, please seek financial advice. View the original at

Chinese equities occupy an interesting position in the world’s equity markets. Few other developed countries have as tightly regulated of a market with as high volatility.

Despite the fact that many Chinese equities trade in value territory, the ramifications of political risk and over-regulation remain difficult for traders to price in. Government policies especially around continued back-and-forth COVID-19 lockdowns and supply chain issues make risk difficult for investors to gauge.

Couple this with systemic risk in the Chinese real estate market as a result of the Evergrande credit crisis and a recent contraction in the tech sector, and what you have is a very volatile, yet opportune environment for bullish and bearish traders alike to take a position in.

Trends in June and July

Investor inflows into Chinese equity ETFs surged strongly in June following signs that the country’s draconian “Zero-COVID” policies were abating, along with indicators that the government’s anti-trust crackdown on the technology sector was becoming more lenient. A combined total of $5.8 billion USD was recorded flowing into Chinese equities, exceeding records last set in January.

YTD (as of July 8th, 2022), the iShares MSCI China ETF (MCHI) is only down -11.54%, compared to the -18.70% loss suffered by the S&P 500 Index. MCHI suffered its deepest drawdown on March 15th, hitting a 52-week low of $43.59 due to a sell-off sparked by weaknesses in large Chinese web companies like Alibaba (BABA), Tencent Holdings (TCEHY), and JD.com (JD).

The earlier sell-off was precipitated by concerns about China’s ties to Russia given the latter’s invasion of Ukraine and the possibility of sanctions. In addition, regulatory concerns about possible de-listings of Chinese equities from U.S. exchanges prompted many traders to risk-off, which caused the major Chinese indices to plunge further.

Throughout 2022, the Chinese equity sell-off has affected its technology sector disproportionately. Sentiment towards Chinese tech and web companies soured amid Beijing’s crackdown on perceived anti-competitive practices. Beijing’s further unwillingness to cut interest rates given the state of the economy and market further dampened investor outlooks.

Retail disadvantages

Foreign investors looking to trade Chinese equities face significant disadvantages from both currency risk and accessibility. For the former, surges in the USD-YUAN pair can cause significant fluctuations in value for Chinese equities if purchased and held directly. This can put traders at a significant disadvantage if FX rates move against them despite the stock moving in the predicted direction.

For the latter, investors who cannot buy Chinese equities directly must rely on American Depository Receipts (ADRs) or Contracts for Differences (CFDs). These instruments allow investors to gain exposure to foreign equities without the need for currency conversion but can suffer from low liquidity and margin requirements.

An alternative is Leverage Share’s suite of physically backed exchange-traded products (ETPs). These instruments trade in USD, EUR, and GBP on local exchanges like regular equities. Compared to other ETPs that use derivatives to gain exposure, Leverage Shares ETPs are physically backed by their underlying equities, minimizing counterparty and currency risk.

Bullish and bearish traders alike can utilize Leverage Shares’ ETPs to speculate or hedge risk when it comes to Chinese equities.

Your capital is at risk if you invest. You could lose all your investment. Please see the full risk warning here.

Related Posts


Generic filters
Exact matches only
Search in title
Search in content
Search in excerpt
Filter by Categories
In the press
Market Insights

Sandeep Rao


Sandeep joined Leverage Shares in September 2020. He leads research on existing and new product lines, asset classes, and strategies, with special emphasis on analysis of recent events and developments.

Sandeep has longstanding experience with financial markets. Starting with a Chicago-based hedge fund as a financial engineer, his career has spanned a variety of domains and organizations over a course of 8 years – from Barclays Capital’s Prime Services Division to (most recently) Nasdaq’s Index Research Team.

Sandeep holds an M.S. in Finance as well as an MBA from Illinois Institute of Technology Chicago.

Oktay Kavrak


Oktay joined Leverage Shares in late 2019. He is responsible for driving business growth by maintaining key relationships and developing sales activity across English-speaking markets.

He joined LS from UniCredit, where he was a corporate relationship manager for multinationals. His previous experience is in corporate finance and fund administration at firms like IBM Bulgaria and DeGiro / FundShare.

Oktay holds a BA in Finance & Accounting and a post-graduate certificate in Entrepreneurship from Babson College. He is also a CFA charterholder.

Julian Manoilov

Senior Analyst

Julian joined Leverage Shares in 2018 as part of the company’s premier expansion in Eastern Europe. He is responsible for web content and raising brand awareness.

Julian has been academically involved with economics, psychology, sociology, European politics & linguistics. He has experience in business development and marketing through business ventures of his own.

For Julian, Leverage Shares is an innovator in the field of finance & fintech, and he always looks forward with excitement to share the next big news with investors in the UK & Europe.

Welcome to Leverage Shares

Terms and Conditions


If you are not classified as an institutional investor, you will be categorised as a private/retail investor. At this time, we cannot send communications directly to private/retail investors. You are welcome to view the contents of this website.

If you are an ‘Institutional investor’, you affirm either that you are a Per Se Professional Client, or that you wish to be treated as an Eligible Counterparty Client, both as defined under the Markets in Financial Instruments Directive, or an equivalent in a jurisdiction outside the European Economic Area.

Risk Warnings

The value of an investment in ETPs may go down as well as up and past performance is not a reliable indicator of future performance. Trading in ETPs may not be suitable for all types of investor as they carry a high degree of risk. You may lose all of your initial investment. Only speculate with money you can afford to lose. Changes in exchange rates may also cause your investment to go up or down in value. Tax laws may be subject to change. Please ensure that you fully understand the risks involved. If in any doubt, please seek independent financial advice. Investors should refer to the section entitled “Risk Factors” in the relevant prospectus for further details of these and other risks associated with an investment in the securities offered by the Issuer.

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.

This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.

United States Visitors

The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.

Persons accessing this website in the European Economic Area

Access to this site is restricted to Non-U.S. Persons outside the United States within the meaning of Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Each person accessing this site, by so doing, acknowledges that: (1) it is not a U.S. person (within the meaning of Regulation S under the Securities Act) and is located outside the U.S. (within the meaning of Regulation S under the Securities Act); and (2) any securities described herein (A) have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or other jurisdiction and (B) may not be offered, sold, pledged or otherwise transferred except to persons outside the U.S. in accordance with Regulation S under the Securities Act pursuant to the terms of such securities. None of the funds on this website are registered under the United States Investment Advisers Act of 1940, as amended (the “Advisers Act”).

Exclusion of Liability

Certain documents made available on the website have been prepared and issued by persons other than Leverage Shares Management Company. This includes any Prospectus document. Leverage Shares Management Company is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, Leverage Shares Management Company shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes no guarantee as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.

Leverage Investment

Leverage Shares exchange-traded products (ETPs) provide leveraged exposure and are only suitable for experienced investors with knowledge of the risks and potential benefits of leveraged investment strategies.


Leverage Shares Management Company may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes (click here for more information). These are statistical data about users’ browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking ‘I agree’ below, you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps Leverage Shares Company provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.

This website is maintained by Leverage Shares Management Company, which is a limited liability company and is incorporated in Ireland with registered offices at 2 Grand Canal Square, Grand Canal Harbour, Dublin 2. 

By clicking you agree to the Terms and Conditions displayed.