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China Cleantech Investing

Energy & Environmental Shares Lead Shanghai Past 3,200

Written by Brian Hicks
Posted November 16, 2009

The China Securities Journal reports that cleantech, energy, and environment-related companies led China's benchmark Shanghai Composite Index up to start the week.

With President Obama's trip to China expected to focus heavily on pollution control, technology, and clean energy, mainland investors are optimistic that Chinese companies will be able to capitalize on international renewable energy and emissions targets.

Several stocks like Zhejiang Feida Environmental Protection Technology (600526.SS) hit their 10% daily appreciation limit, but enthusiasm would have sent those shares far past the government-imposed threshold.

That increase propelled the Shanghai Composite Index past 3,200, which is a psychological resistance point for that market much as 10,000 is significant to Dow Jones Industrial Average observers.

Foreign direct investment (FDI) in China is also on the rise, signaling that not only residents of the Middle Kingdom but outsiders also view the country's growth rebound as a favorable time to put money on domestic energy and tech shares. FDI has increased in each of the past three months (Sept.-Nov.).

Finally, a big lesson from China's cleantech bull market is that not only giant state-owned enterprises (SOEs) like Sinopec (NYSE:SHI) are benefiting from international attention. The Claymore/AlphaShares China Small Cap ETF (NYSE:HAO) has quietly outperformed many leading mid- to large-cap exchange-traded funds that tap Shanghai, Hong Kong and Shenzhen shares.

The small-cap HAO fund (Chinese for "good," punnily enough) just broke the 100% mark since January 1, almost quintupling the Dow's run during the same period. 

hao vs dow

You can stay up to date on Chinese clean energy shares and their gains with the Grid Parity blog at www.greenchipstocks.com.

-Sam Hopkins

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