Daily Posts

EU Vehicles Tariffs Lower Than Expected, Week in Review

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Week in Review

  • Asian equities were mostly higher this week as Japan outperformed the region, Hong Kong saw modest gains, and Mainland China was lower.
  • China released mixed purchasing managers’ index (PMI) readings this week as Manufacturing outpaced Non-Manufacturing (Services), though the private and official surveys for both showed expansion month-over-month.
  • Real estate stocks were higher this week as online real estate brokerage platform “Beike”, operated by KE Holdings, reported its highest monthly transaction volume in three years in June.
  • Alibaba announced Tuesday that the company repurchased $5.8 billion worth of shares in the first quarter with $26.1 billion remaining in the current program, which extends through the first quarter of 2027.

Friday’s Key News

Asian equities were mixed overnight as investor’s awaited the US jobs report this morning, which indicated that the US economy added more jobs than expected though unemployment increased, making for a complex, but still strong case for rate cuts towards the end of the year. Happy belated 4th of July!

The EU announced provisional new tariff rates for China-made electric vehicles that were slightly lower than expected. BYD, one of the largest exporters, will see its rate remain unchanged at 17%. Th average duty paid will be near 20%. The electric vehicle ecosystem was mostly lower overnight.

Internet stocks were mostly lower. NetEase delayed a title release, which weighed on its shares. Meanwhile, buyback champions Alibaba and JD.com were lower though Alibaba is up for the week.

Tourism stocks were higher on positive policy developments. The central government released a pledge to improve tourism infrastructure. Domestic tourism is roaring back in China. Our team visited tourism hotspot Xian last month, where we were told that visitors to the famous terra-cotta warriors were 10 million in 2023, up from only 2 million in 2019.

International tourism is coming back too, albeit slowly. According to the South China Morning Post, foreigners entering the country more than doubled from last year in the first six months of this year. This is mainly due to increased visitors from countries that have been granted visa-free access to China, which include multiple EU countries such as France and Germany.

Financials were underperformers overnight. The PBOC announced multiple long-term government borrowing mechanisms with key partners, which could help fund support for the consumer going into the Third Plenum meetings in ten days. The theme among analysts regarding the meeting has been preparing for a “post-property” China. What does this mean? An economy that is more concentrated in domestic consumption and innovation, rather than real estate speculation.

The Hang Seng and Hang Seng Tech indexes both closed lower by -1.27% and -1.45%, respectively, overnight on volume that was basically flat from yesterday. Mainland investors bought a net $45 million worth of Hong Kong-listed stocks and ETFs overnight via Southbound Stock Connect. The top-performing sectors overnight were Health Care, which gained +2.67%, Materials, which gained +1.80%, and Utilities, which fell -0.19%. Meanwhile, the worst-performing sectors were Financials, which fell -2.46%, Information Technology, which fell -1.61%, and Real Estate, which fell -1.50%.

Shanghai, Shenzhen, and the STAR Board diverged to close -0.26%, 0.52%, and 1.23%, respectively, on volume that decreased -2% from yesterday. The top-performing sectors overnight were Health Care, which gained +2.57%, Materials, which gained +1.42%, and Communication Services, which gained +0.51%. Meanwhile, the worst-performing sectors were Financials, which fell -1.47%, Consumer Staples, which fell -1.25%, and Energy, which fell -0.60%.

Last Night's Performance

Country/IndexTicker1-Day Change (%)
China (Hong Kong)HSI Index-1.3
Hang Seng TechHSTECH Index-1.5
Hong Kong TurnoverHKTurn Index-0.5
HK Short Sale TurnoverHKSST Index11.5
Southbound Stock Connect Net Buy/Sell (US $ Millions)N/A-0.6
China (Shanghai)SHCOMP Index0.3
China (Shenzhen)SZCOMP Index0.5
China (STAR Board)Star50 Index1.2
Mainland Turnover.chturn Index4.8
Nouthbound Stock Connect Net Buy/Sell (US $ Millions)N/ANot Available
Jing Daily China Global Luxury IndexCHINALUX Index0.5
JapanNKY Index0
IndiaSENSEX Index-0.1
IndonesiaJCI Index0.5
MalaysiaFBMKLCI Index-0.4
PakistanKSE100 Index-0.1
PhilippinesPCOMP Index-0.2
South KoreaKOSPI Index1.3
TaiwanTWSE Index0.2
ThailandSET Index0.8
SingaporeSTI Index-0.8
AustraliaAS51 Index-0.1
US & Hong Kong Dually ListedTicker1-Day Change (%)
Tencent HK700 HK Equity-0.7
Alibaba HK9988 HK Equity-0.3
JD.com HK9618 HK Equity-0.7
NetEase HK9999 HK Equity-1.4
Yum China HK9987 HK Equity-1
Baozun HK9991 HK Equity-3.3
Baidu HK9888 HK Equity-1
Autohome HK2518 HK Equity0.2
Bilibili HK9626 HK Equity0.2
Trip.com HK9961 HK Equity-2.6
EDU HK9901 HK Equity0.3
Xpeng HK9868 HK Equity-3
Weibo HK9898 HK Equity-0.6
Li Auto HK2015 HK Equity-1.9
Nio Auto HK9866 HK Equity-0.8
Zhihu HK2390 HK Equity0.4
KE HK2423 HK Equity-1.2
Noah HK6686 HK Equity-1.6
Tencent Music Entertainment HK1698 HK Equity-0.2
Meituan HK3690 HK Equity-0.5

Last Night’s Exchange Rates, Prices, & Yields

  • CNY per USD 7.27 versus 7.27 yesterday
  • CNY per EUR 7.87 versus 7.86 yesterday
  • Yield on 1-Day Government Bond 1.24% versus 1.24% yesterday
  • Yield on 10-Year Government Bond 2.28% versus 2.25% yesterday
  • Yield on 10-Year China Development Bank Bond 2.36% versus 2.34% yesterday
  • Copper Price +0.39%
  • Steel Price -0.89%