The non-ferrous metals sector led the market higher again today (June 15th), with the largest ETF tracking the sector, the Huabao Non-ferrous Metals ETF (159876), seeing its intraday price surge over 3.7%. It is currently up 3.53%, aiming for its fifth consecutive daily gain.
Signals of a sustained uptrend from the bottom may be emerging, with capital actively flowing in. As of this writing, the Huabao Non-ferrous Metals ETF (159876) has seen a net real-time subscription of 12 million units. Last Friday alone, it attracted 958.7 million yuan in net inflows.
Among its constituents, Jinduicheng Molybdenum Co., Ltd. hit its third consecutive limit-up. Yunnan Tin Co., Ltd. and Chifeng Jilong Gold Mining Co., Ltd. rose over 8%. Among the heavyweight stocks, Zijin Mining Group Co., Ltd. and China Molybdenum Co., Ltd. gained more than 7%, while China Northern Rare Earth (Group) High-Tech Co., Ltd. and Aluminum Corporation of China Limited rose over 1%.
Key Developments
The United States and Iran have finally announced an end to hostilities. Both sides will formally sign a memorandum of understanding in Switzerland this Friday, followed by a 60-day negotiation period on nuclear issues. Former President Trump announced the lifting of the U.S. naval blockade on Iran and authorized free passage through the Strait of Hormuz. Influenced by the easing Middle East tensions, spot gold rose 2% in early Monday trading, spot silver broke above the $70 per ounce mark, and the market also scaled back bets on Federal Reserve interest rate hikes.
Industry insiders point out that overseas expectations for interest rate hikes may swing back. With the signing of the strait agreement and the debut of the new Fed Chair Wash, if these two events proceed smoothly, the market might pare back some of the overly aggressive rate hike expectations priced in earlier. This could present a repair opportunity for non-ferrous metals, which are sensitive to changes in the discount rate (denominator).
It is worth noting that today (June 15th) marks the effective date for the quarterly rebalancing of the Huabao Non-ferrous Metals ETF's (159876) underlying index (CSI Non-ferrous Metals Index). This rebalancing involves replacing five constituents with five new ones, incorporating leading companies: China National Nuclear Corporation (rare earth), Zhangyuan Tungsten Co., Ltd. (tungsten), Shengtun Mining Group Co., Ltd. (cobalt), Zhuzhou Smelter Group Co., Ltd. (lead & zinc), and Sinomach New Materials Co., Ltd. (metal new materials).
The CSI Non-ferrous Metals Index is rebalanced every six months. This round removed the five smallest companies by market capitalization from the 60 constituents (with a combined market cap of 642.13 billion yuan) and added five companies with higher total market capitalizations (combined market cap of 2925.19 billion yuan). This regular calibration ensures the index better reflects the performance of leading companies in the non-ferrous metals industry.
Metals Sector Momentum and Investment Tools
The Huabao Non-ferrous Metals ETF (159876) and its feeder fund (Class A: 017140, Class C: 017141) track an index that comprehensively covers sectors including copper, aluminum, gold, rare earths, and lithium. This full-category coverage allows for better capture of the sector's beta movements. Furthermore, this ETF is a margin trading and securities lending target, making it an efficient tool for a one-stop allocation to the non-ferrous metals sector.
As of the end of May, the latest size of the Huabao Non-ferrous Metals ETF (159876) exceeded 15 billion yuan, making it the largest ETF among the three products tracking the same underlying index in the market.
Comments