China’s CSI 300 Index closed 0.9% higher to 3,521.30, a level last seen in early January. China’s A-share market appears immune to the slumping yuan with the CSI 300 Index rising 5.5% this month, even as the official yuan fell 2.1%.

CSI 300 has risen in November even as the yuan fell.

Societe Generale

So what created this mini rally?

Material and industrial stocks have been doing well.

Industrial metals have rallied impressively this month since Donald Trump‘s surprise win on November 8. In addition, China’s central planner the NDRC has released infrastructure projects worth a total of 338 billion yuan this month, already exceeding October’s total of 299 billion yuan. As we head into the year-end, Beijing needs to make sure the economy is on track to hit its 6.5%-7% GDP growth target. And don’t forget China will undergo its once-every-five-years power transition next year. If anything, Beijing needs to make sure the economy is stable.

So we have the world’s two largest economies – the U.S. and China – promising to build bridges, roads and airports (even though some may lead to nowhere). I am feeling bullish already!

So who are the biggest winners this month? Jiangxi Copper (600362.China) has soared 39%, China State Construction Engineering (601668.China) has gained 28.5%, and China Railway Construction Corp. (601186.China) is up 19%.

In Hong Kong, the Hang Seng China Enterprises Index is poised to close higher for the sixth consecutive day. Among the biggest winners this month are construction companies as well as insurance companies. China’s benchmark government bond yields have also been on the rise since Trump’s win. For details, see my November 21 blog “Why Are Chinese Insurance Companies Soaring?“.

Year-to-date, the Deutsche X-Trackers Harvest CSI 300 China A-shares ETF (ASHR) has tumbled 9.8% because of the early January sell-off and the weaker yuan.