Deutsche Bank has issued the Solactive China Consumer Index Certificate based on the Solactive China Consumer Index which is targeted at investors who seek the ability to participate in the growth of retail sales in China.
Chinese households possess a huge spending capacity, the bank writes. From 2010 to 2017, the retail sales of consumer goods in China accumulated from RMB158 billion (USD22.7 billion) to more than RMB366 billion (USD52.7 billion).
This data equates to a Compound Annual Growth Rate of 11 per cent per annum over the last eight years, according to the firm.
The latest index from Solactive is designed to track the price movements of the 20 largest Chinese companies by market capitalisation, which are classified in any of the three following business segments: Consumer Services, Consumer Durables, and Consumer Non-Durables.
Beyond that, eligible companies have to derive more than 75 per cent of their revenues from China, a factor that ensures investors obtain a direct exposure in the Chinese domestic market.
Mathias Schoelzel, Head of X-markets at Deutsche Bank, says: “The Chinese consumer sector is one of the sectors with a strong growth potential. With our new index tracker, we offer the opportunity to participate in a selection of the largest Chinese companies. We regard the Solactive China Consumer Index as a great addition to our existing index universe.”
Timo Pfeiffer (pictured), Head of Research at Solactive, says: “China’s demographics present a huge opportunity for steady, and long-term investment strategy. As more Chinese citizens raise their living standards, the purchasing power of domestic households more than doubled within the last eight years. Alongside a growing middle-class, which forms the backbone of every country’s economy, China’s consumption power is expected to experience further increases.”
