There's a 'strong case' for China entering a bull market, says KraneShares' Brendan Ahern

Welcome back, Lots of headlines on China this week. President Xi is touring Europe for the first time in five years. Tesla is making deals in the mainland and the US is imposing new trade restrictions, garnering a warning from the IMF about global GDP impact. Meanwhile, Chinese stocks they’re rallying the Hong Seng and Crane chairs China Internet ETF, outperforming the S&P since April, essentially matching those year to date gains. But Morgan Stanley and clock towers see the rally fading. While Stanley drunken Miller he was more vociferous. He told CNBC yesterday he’d never in invest there while she is in power. Joining me now to discuss is Brendan Ahern. He’s Crane Shares Chief Investment officer. He’d never invest there. Brendan, he’s done. He’s over. What’s what your, what’s your response? Well, I think like many investors, Mr. Druckenmiller, who obviously value highly respect and every investor should follow. I think there’s been a lack of trust and confidence following China’s Internet regulation that that really hurt a lot of publicly traded equities as well as private equity investors as well. So that it’ll take a long time for that trust to come back. At the same time, there are investors who are willing to come back much quicker, which would be investors in China buying Chinese equities as we’re seeing today. You are pointing to what is it, a TH M online car sales company, auto, home at home, what is it called? Beat analysts, expectation, blah blah blah blah blah. What do you think is going on here that we need to be paying attention to? Well, I think I think we’ve had post a derivative induced meltdown in the mainland markets in Hong Kong market in January. We’re seeing a very significant rally. At the same time we’re not seeing very significant foreign investor participation and I think that’s because many investors got burned trying to buy the dip. What we think is different this time is what Auto Home showed is that analysts expectations for the companies are very, very low and they beat on the big three revenue adjusted EPA, Justice, Netcom Next Tuesday morning we have Alibaba and 10 Cent reporting, next Thursday we have jd.com and Badu. So. So all we’re saying is that Chinas economy is slowly improving as we saw with Q1 GDP right as well as you’re seeing the fundamentals of the underlying companies improving. We just think investors are under allocated if this rally gets some continued legs. My trillion dollar question for you because you follow this much more closely than I do. You think something fundamental has changed where the leadership is going to allow or even encourage, for instance, those once former tech high Flyers to rebound and really be able to see some lift off again. Yeah, I mean China’s economy. We do Kelly, because China’s economy needs domestic consumption. That export driven manufacturing in China has been quite strong driven by demand from the US, Asia and Europe. At the same time, they need a rise in domestic consumption and that’s where the companies within K Web are, the transmission engines for domestic consumption as it occurs online. So you can’t kill the companies that allow for consumption to take place, right. And that’s why we think they backed off the regulation. Alright. So reminds me of their utility ask conversation we had about this a couple of years ago. Brendan, for now, thank you very much. We appreciate.