China stock market turnaround hinges on stimulus: KraneShares CIO [Video]

China’s slow post-Covid recovery could be a lasting headwind for its stock market.

With the mainland’s two largest indexes — the Shanghai Composite and the Shenzhen Composite — each negative so far in 2024, KraneShares Chief Investment Officer Brendan Ahern thinks government stimulus is necessary to kick-start the country’s stock market performance.

“Investors, particularly in mainland China … [are] looking for much, much stronger fiscal support from the government,” he told CNBC’s “ETF Edge” this week. “Thus far, we’ve been left waiting.”

Ahern, whose firm runs the KraneShares CSI China Internet ETF (KWEB), added that Chinese households are still reluctant to spend at pre-pandemic levels. The most recent read from the country’s National Bureau of Statistics showed consumer goods retail sales contracting slightly in June.

“That scar tissue, as well as a real estate crisis in China, has really weighed on the balance sheet of the household,” he said.

This week’s post-earnings plunge in PDD Holdingsis emblematic of …