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Key News

Asian equities were largely higher as Japan’s Nikkei broke above the 30k level yesterday and Hong Kong returned to work after a four-day holiday. Mainland China and Taiwan remain on holiday until tomorrow. The Hang Seng Index gained +1.9% on strong volume as high energy prices led to a very strong day for the sector as value sectors outperformed across the board. Hong Kong volume leaders were Tencent, which fell -1.59% as Clash of Clans provider Supercell reported light revenues, Meituan, which dropped -1.3%, Kuaishou Technology, which rose +1.26%, Alibaba Hong Kong, which gained +1.23%, Ping An Healthcare, which was up +8.05%, Xiaomi, which gained+5.35%, HSBC, which rose +7.65%, Ping An Insurance, which was up +0.78%, energy giant CNOOC, which gained +9.53%, and Hong Kong Exchanges, which rose +2.43%. 

Chinese New Year (CNY) is often called the largest human migration annually. As China’s population heads out on vacation, many factory workers return to their hometowns and many city dwellers return to their ancestorial homes in the countryside. A recent narrative amongst brokers and analysts is that this year’s travel-constrained Chinese New Year will produce similar results as last year's Q1 quarantine. Internet and online related companies are likely to be the winners. Furthermore, sub-themes such as e-commerce, online gaming, and online video/entertainment are likely to outperform at the expense of hotels, airlines, and trains. Movie theater ticket sales are garnering a fair amount of media attention.

JD Logistics, JD.com’s delivery network, filed for a Hong Kong IPO led by investment banks BofA Securities, Goldman Sachs, and Haitong. I’ll dive into the filing today!

H-Share Update

The Hang Seng opened higher and stayed there, closing up +1.9% at 30,746. Volume increased by 138% from last Thursday’s half-day though still a healthy 153% above the 1-year average while there were 49 advancers and 3 decliners. The 196 Chinese companies listed in Hong Kong within the MSCI China All Shares Index gained +0.75%, led by energy +8.14%, materials +7.82%, tech +4%, industrials +3.02%, real estate +2.12%, financials +1.56%, and utilities +1.37% while communication fell -1.36% and staples -0.53%. Southbound Stock Connect remains closed. 

A-Share Update

Shanghai, Shenzhen, and STAR Board – Closed

Last Night’s Exchange Rates & Yields

• CNY/USD 6.46 versus 6.46 yesterday
• CNY/EUR 7.85 versus 7.84 yesterday