Week in Review

• Despite being closed on Wednesday for the Ching Ming Festival, Mainland China markets were mostly higher this week, led by semiconductor names on increased policy support and efforts to onshore the industry.
• Positive economic data including a higher-than-expected Caixin services PMI in March and a bank survey indicating higher rates of consumption among urban customers also helped fuel optimism in Mainland (A Share) markets.
• France’s President Macron and the European Commission’s Ursula von der Leyen visited China this week, where the pair lobbied for a constructive relationship on trade and Ukraine.

Key News

Most Asian equity markets were closed for Good Friday though the markets that were open did well as South Korea gained +1.27%, though Pakistan fell -0.75%.

The big news overnight was that Tencent and TikTok’s parent ByteDance agreed to share videos across their platforms following several legal run-ins. ByteDance’s short video app Douyin “…can cut short clips from Tencent Video’s long videos and post them,” according to Yicai Global. I do not think Tencent-backed short video provider Kuaishou is going to do well in Monday’s Hong Kong trading. This is yet another indication that China’s internet regulatory oversight cycle is complete.

Alibaba is providing access to its Chat GPT-like AI-driven chat bot to clients of its cloud computing unit.

France’s President Macron’s visit to China has garnered significant attention as he is now joined by European Commission President Ursula von der Leyen.

Even with Hong Kong closed, Mainland China had a good day as the STAR Board outperformed and extended its up-day streak to seven. China’s volume was surprisingly strong at 116% of the 1-year average despite the Northbound Stock Connect was closed, an indication of the lack of influence foreign investors and foreign sentiment has on the Mainland stock market.

Real estate had a strong day, gaining +3.82% despite Western media’s narrative that Evergrande is China’s Lehman moment.

Today’s most heavily traded stock was ZTE, which gained +9.99% on chatter that it will launch servers geared towards AI/ChatGPT bandwidth needs. Investors seemed focused on growth/tech stocks and sectors. 

For those celebrating, enjoy your Passover and Easter!  

The Hang Seng and Hang Seng Tech indexes were closed.

Shanghai, Shenzhen, and the STAR Board gained +0.45%, +0.93%, and +1.23%, respectively, on volume that decreased -11.58% from yesterday, which is 116% of the 1-year average. 3,229 stocks advanced while 1,415 stocks declined. Growth and value factors were mixed as small caps outperformed large caps. The top-performing sectors were real estate, which gained +3.8%, healthcare, which gained +2.39%, and communication services, which gained +2.3%. Meanwhile, energy and consumer staples were off -0.62% and -0.43%, respectively. The top-performing subsectors were real estate, household products, and internet services. Meanwhile, precious metals, office supplies, and agricultural products were the worst-performing. Northbound Stock Connect was closed today. CNY gained +0.05% versus the US dollar to close at 6.869 from 6.874.  Treasury bonds gained while Shanghai copper eased and steel gained. 

Major Chinese City Mobility Tracker

Last Night's Performance

Last Night’s Exchange Rates, Prices, & Yields

• CNY per USD 6.87 versus 6.87 yesterday
• CNY per EUR 7.49 versus 7.51 yesterday
• Yield on 1-Day Government Bond 1.50% versus 1.47% yesterday
• Yield on 10-Year Government Bond 2.85% versus 2.86% yesterday
• Yield on 10-Year China Development Bank 3.02% versus 3.04% yesterday
• Copper Price -0.03%
• Steel Price 0.84%