Key News

Asian equities were mostly higher overnight as Hong Kong opened higher following a three-day holiday in celebration of Lunar New Year while Mainland China will remain closed until Monday. Internet stocks were mostly higher overnight on reopening optimism after data suggests that travel surged for the Lunar New Year.

Electric vehicles (EVs) had a great session in Hong Kong as BYD led gains in the industry, up +6% on speculation that Ford may sell its German plant to the EV company.

The Hang Seng rose to its highest close since April as tourism names and EVs led the market higher. Macau stocks were higher at the open, but mostly declined throughout the day to close lower.

The Financial Times and other media outlets have decided to gang up on Apple over its China exposure. This is precisely what we have been talking about for years now. Apple and other US companies are completely reliant on supply chains in China to satisfy not only demand in the US, but also demand in China and the rest of Asia. The complex fabric of supply chains in China is extremely difficult to replicate elsewhere in the world. China is likely to remain the world’s factory for the foreseeable future. Politicians appear to be blind to this reality.

The South China Morning Post had an editorial about the Asian Financial Forum that occurred in Hong Kong last week noting significant optimism among investors and financial sector executives about the city’s reopening. Many are likely to return to the financial hub after a mass exodus due to stringent COVID policies.

The Hang Seng and Hang Seng Tech indexes gained +2.37% and 4.26%, respectively, overnight on volume that increased +25.67% from last Friday. Interestingly, short sale turnover increased by +30% as clearly some investors are anticipating volatility in the coming days. Among the top-performing subsectors were EVs, tourism,  and real estate development.

Last Night’s Exchange Rates, Prices, & Yields

Mainland China’s currency and bond markets were closed overnight.