Chinese investors bet on stocks they saw potentially benefiting from the conflict in Ukraine, as shares in energy firms and payment service companies rose sharply Monday on markets in China and a major fund house repeated a warning against speculation.
In a statement on Monday, GF Fund Management said that the price of its fund for qualified domestic institutional investors tracking the Dow Jones U.S. Select Oil Exploration and Production Index was "significantly higher" than net asset value.
"Investors who blindly invest in funds at a high premium to net asset value may suffer large losses," the statement said, adding that the fund was operating normally. It was GF's second such risk statement since Friday after investors betting on a jump in oil prices jolted the fund's share price higher in secondary markets.
Chinese payment-related stocks jumped as investors wagered that the United States and Europe kicking Russia out of the SWIFT global payment system would benefit China's own cross-border payment system and accelerate the development of the country's digital currency, the e-CNY.
Ratcheting up sanctions following Russia's invasion of Ukraine, the United States and Europe said on Saturday they would banish big Russian banks from SWIFT and announced other measures to limit Moscow's use of a $630 billion war chest.
Investors speculating on the impact of the news pushed shares of leading Chinese companies involved in developing digital yuan payment infrastructure higher, including Newland Digital Technology Co., Lakala Payment Co. and Client Service International Inc., despite weakness in the broader market.
A sub-index tracking the internet finance sector jumped more than 2% early in the trading day before trimming gains.
The SWIFT sanctions against Russia "is a milestone event that will accelerate the process of de-dollarisation," wrote Dang Congyu, an analyst at Founder Securities.
"Although it's hard to replace SWIFT in the short term, this incident is very beneficial to yuan's globalization over the long run."
The view was echoed by Guosheng Securities, who recommended Chinese payment-related stocks, citing the potential of China's own payment system, CIPS, and digital yuan, to break the dollar's hegemony.
Against the backdrop of global power competition, the digital yuan "will play a key role in promoting the yuan's global status, and its development will accelerate," analysts Liu Gaochang and Yang Ran wrote.
China's CSI Defense sub-index also surged on Monday, climbing more than 2.5% at one point, while energy shares rose 1.6%, against a 0.35% drop in the blue-chip CSI300 index.
