Asian markets were lower while Japan, Taiwan and Indonesia were outliers in the positive column. Hong Kong, Korea, India, Singapore, Malaysia, and Thailand all down. News flow was light other than Hong Kong head Carrie Lam’s announcement banning masks in public, which led to an afternoon slump in Hong Kong equities. The law is aimed at deterring the smaller but increasingly violent demonstrations, which have had a significant effect on the local economy as tourists avoid Hong Kong. Apple suppliers were a regional bright spot as the iPhone 11’s launch was accompanied by rumors of increased production.
The Hang Seng fell in the mid-afternoon session to close -1.11%/-289 index points and below 26k at 25,821. Volumes were 10% higher day over day, but well off the 1-year average. Breadth was atrocious with only 6 advancers and 43 decliners led by AIA-1.41%/-35.3 index points, HSBC -1.02%/-26.6 index points and CCB -11.17%/-22.7 index points. Apple supplier AAC was the leading gainer +3.2%/+2.8 index points while property company Sun Hung Kai Properties was the largest decliner -2.89%/-11.3 index points though Macao gaming stocks were weaker. The Hong Kong stocks within the MSCI China All Shares were off -0.4% as several of the Hang Seng’s big decliners are Hong Kong domiciled companies (AIA, HSBC and HK Stock Exchange) and therefore are developed markets, not EM. Real estate gained +1.21%, discretionary +0.68%, utilities +0.48% and healthcare +0.44% while energy fell -1.39%, financials -0.83%, communications -0.8% and industrials -0.26%. Southbound Connect was closed. Markets will be closed in Hong Kong on Monday.
Mainland China Markets were Closed Today
Tencent bought back another 120,000 shares as their dollar cost averaging program occurred for the 28th time since beginning in late August. Several brokers noted that Call of Duty Mobile has become a massive hit with 20 million downloads across 33 countries in the first 24 hours. The game was released by Activision and co-produced by Tencent.
Monday’s – Mainland China Closed Until Next Tuesday
- CNY 7.14 versus 7.12 Friday
- Yield on 1 Day Chinese Gov’t Bond 1.83% versus 1.75% Friday
- Yield on 10 Year Chinese Gov’t Bond 3.10% versus 3.11% Friday
- Yield on 10 Year China Development Bank Bond 3.69% versus 3.68% Friday
- Commodities were mixed on the Shanghai & Dalian Exchanges with Dr. Copper +0.60% .