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Key News

Gong Xi Fa Cai is a Chinese term used at the New Year holiday to wish people prosperity in the new year. Thus we begin the Year of the Ox, though as investors, we hope for a year of the bull. Mainland China, Japan, South Korea, and Taiwan were closed today while Hong Kong had a half day. President Biden and President Xi spoke last evening for the first time in a small step toward repairing political relations. Several areas of cooperation were discussed such as climate change and the pandemic. There was also an “airing of grievances” including human rights and economic policies. Regardless, it was a step in the right direction. Hong Kong is loosening social distancing measures. There were reports that China and India have pulled troops back following a border run-in last year.

Hong Kong stocks overcame morning losses as the Hang Seng Index closed up +0.45% at 30,173. The Chinese companies listed in Hong Kong within the MSCI China All Shares Index gained +0.57%. Tencent was in the news after executive Zhang Feng was arrested on corruption charges as the company said the arrest was on “allegations of personal corruption and has no relation to Weixin or WeChat” in a response to Reuters. Zhang is not included on the company's list of executives, so he doesn't appear to be very senior.

Volume leaders were Tencent, the highest volume by value traded today in Hong Kong which was off -0.53%, followed by Meituan, which rose +3.39%, Kuaishou Technology, which gained +0.25%, Ping An Healthcare, which was up +21.1% after Ark Investment disclosed a position, which is great for us as we already own it, but a bit absurd, Alibaba Hong Kong, which fell -0.38%, GCL-Poly, which was up +1.67%, Xiaomi, which gained +2.19%, China Construction Bank, which gained +1.47%, Hong Kong Exchanges, which was up +0.19%, and Ping An Insurance, which fell -0.72%. CanSino Biologics rose +2.24% after Mexico approved its vaccine while health care was largely higher on yesterday’s news of supportive policies regarding traditional Chinese medicine. Connect trading was closed while the vast majority of Asian equity markets are off tomorrow.

In addition to the daily and weekly returns, I included the 1-year returns as well. You’ll notice several blank spaces in the 1-year column versus the daily and weekly. The STAR Board index and several Hong Kong listings didn’t exist a year ago. China’s capital markets will continue to grow in the years to come. Pretty amazing!

Hong Kong is closed tomorrow and Monday, while Mainland markets are closed today through next Thursday. Northbound and Southbound Stock Connect are closed until next Thursday as well. CLN will take a hiatus until next Tuesday.

H-Share Update

The Hang Seng overcame losses at the open to close up +0.45%/+134 index points at 30,173 in the half-day session. Volumes were off -47% from yesterday while breadth saw 32 advancers and 16 decliners. The 196 Chinese companies listed in Hong Kong within the MSCI China All Shares Index gained +0.57% led by discretionary +1.97%, tech +1.49%, health care +1.2%, and utilities +0.8%, while communication fell -0.49%, staples -0.48%, and real estate -0.14%. Southbound Stock Connect is closed.

A-Share Update

Shanghai, Shenzhen, and STAR Board – Closed

Last Night’s Exchange Rates & Yields

• CNY/USD 6.46 versus 6.45 yesterday
• CNY/EUR 7.84 versus 7.82 yesterday