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IG gives traders the ability to gain exposure to these normally off-limit Chinese markets through CFDs.
Trading global share CFDs with exposure to China
There are significant trading opportunities in companies that source a large percentage of revenue from China. With IG, you can trade over 550 Australian shares as CFDs.
A few popular Australian share CFDs you can trade with IG which are more exposed to China sentiment include:
- Fortescue Metals (Australia’s most popular China-themed stock, which last year sourced 98% of revenue from China^)
- Iluka Resources (40% revenue from China)
- Rio Tinto (35.4%) and
- Horizon Oil (33.7%)
IG also offers 6000+ global shares CFDs with high exposure to China, giving traders the ability to express their view on China, as well as the booming E-commerce sector, and more:
- WYNN Resorts (sources 72% of group revenue from China)
- YUM! Brands (53%)
- Qualcomm (50%)
- Yahoo (due to its 24% stake in Alibaba)
- Alibaba (China’s equivalent to eBay and Amazon and soon to list in the US)
Trading indices as CFDs
Trading an index gives you access to an entire basket of stocks, rather than one single share. IG offers a range of global indices which gives traders outside of China direct exposure to normally untradeable Chinese markets.
The A50 index is a market-capitalisation weighted index and represents the largest 50 mainland China companies.
This index represents 40 mainland Chinese companies on the Hong Kong Stock Exchange. The 30-day correlation between the H-shares index and the major Chinese stock index (CSI 300) is currently 60%.
This index is a mix of Chinese and Hong Kong companies, where the futures trade on the Hong Kong Futures Exchange. The 30-day correlation between the Hang Seng and the CSI 300 is 60%.
Trading forex with IG
IG offers over 80 FX pairs, including the AUD/USD and a large range of emerging market currencies that have strong two-way trade with China, such as the Korean won and Taiwan dollar.
Since the beginning of the year there has been greater volatility in USD/CNY and clients have subsequently much more active in this pair. Traders are asking if the PBOC continue to weaken the CNY to promote growth and curb speculation, or has the weakness run its course?
The AUD has diverged from traditional drivers such as iron ore and copper, however sentiment around the Chinese economy will always affect the Aussie.
Trading commodities as CFDs
IG offers an extensive range of metals, soft and energy-related commodities, including high grade copper and nickel.