Reports that Chinese authorities were considering measures to help stimulate their domestic property market lifted global risk sentiment last week.
After a dismal week’s performance, London’s leading index finished the week on a high, with China-exposed stocks among the top gainers.
Should China unleash a wave of support for its property market, these stocks will likely be the biggest FTSE 100 winners and provide shareholders with outperformance compared to the benchmark.
The FTSE 100 is heavily exposed to China, and not holding these stocks in a UK equity portfolio could mean the index leaves you in the dust.
Miners
Support for the Chinese property market will likely increase demand for natural resources. The FTSE 100’s mining companies will directly benefit from any subsequent rise in commodity prices.
Companies such as Rio Tinto, Anglo American, Glencore and Antofagasta supply a significant part of the world’s iron ore and copper – crucial materials for construction.
The sector is trading near the lowest levels of the year and is primed for a recovery should Chinese stimulus be delivered.
Prudential
After the divestment of M&G Investments, Prudential is almost entirely focused on Asia and China. Hong Kong accounted for most of Prudential’s income in 2022, and the company is targeting mainland China as a core area of growth in the future.
The company also has operations in Singapore, Malaysia and a number of growth markets in the region.
Prudential shares rallied over 5% last week when reports of possible Chinese stimulus first broke.
Standard Chartered
Standard Chartered also earns a significant proportion of its revenue in Hong Kong. Of their $16,255m income earned in 2022, $11,213m was earned in Asia. Hong Kong and Singapore were the largest contributors.
Standard Chartered recently received approval for a new securities business in mainland China that a stronger Chinese economy will support.
BP & Shell
Although the two companies are not as directly exposed to China as other companies covered in this article, BP & Shell will enjoy the benefits of Chinese stimulus. A more robust Chinese economy will help support oil prices and the oil major’s earnings.