Daily Posts

Intra Day 180, Railway Freight Volumes

Hope all is well!

Hang Seng reached an intra-day high of +0.41% in the morning session before easing and then falling in the afternoon session to end -0.54%. Markets were moving higher as Vice Premier Liu He’s visit to Washington DC is confirmed for January 30th and 31st. There was a mini-flash crash in the afternoon as a small real estate developer by the name of Jiayuan International Group (2768 HK) plunged 81% on no official news. Rumors were the company had missed a bond payment and would default and/or had pledged company stock on a loan. The flash crash spread to another company Sunshine 100 (2680 HK) which dropped -64% as both companies share a board member according to Bloomberg. After the close Jiayuan released a statement saying the rumors are not true and there is no bond repayment in issue. Despite the small size of the companies involved, it is an embarrassing situation for the Hong Kong Stock Exchange and reversed what was shaping up to be a positive day in HK and reverberated across Asian markets. The Hang Seng’s 146 point loss was driven by AIA’s -1.51%/38 point loss on volumes higher 11% day over day though below the 1 year average. Breadth was weak with only 8 advancers and 40 decliners. Within the MSCI China All Shares’ HK stocks, not surprising real estate companies lost -4.54% followed by staples -1.12% driven lower by alcohol names. Utilities were up +0.76% as well as materials +0.48%. Southbound Connect volumes were moderate in balanced trading though volume leader Tencent experienced 4 to 1 buying. Interesting to see Tencent buying from mainland investors (again).

Shanghai & Shenzhen followed HK lower in the afternoon session after a morning rally reversed to end the day at -0.42% and -0.94% on lower volumes. Within the MSCI China All Shares’ mainland stocks, tech was off -1.79% as news of Huawei being indicted by the US weighed on the sector as all sectors were in the red. Northbound turnover was moderate with buyers outpacing sellers. MSCI Inclusion names were volume leaders with buyers outpacing sellers.

PBOC did another liquidity injection following yesterday’s blockbuster day. Disconcerting to see the US media portray the move as economic stimulus as the move is offset January tax payments, annual red envelope corporate bonuses and vacation money for Chinese New Year’s.

Rail freight volume in 2018 grew 9.1% weighing 334 million tons to a year-end total of 4.02 billion tons.

A mainland media source had an interesting article on US LNG imports to China plunge. In the last six months only six LNG vessels have arrived versus 25 in the same time period the year before. The US had expoerted $447 million worth of LNG in 2017.

CNY 6.77

10 Year Treasury Yield hits a new low.

  • Yield on 1 Day Chinese Gov’t Bond 1.81%
  • Yield on 10 Year Chinese Gov’t Bond 3.09% (bond price is 104.50)
  • Yield on 10 Year China Development Bank Bond 3.66% (bond price is 109)

 


Commodities were firmer on both the Dalian and Shanghai