Key News

Asian equities were mixed but mostly higher overnight as the Philippines and Mainland China’s Shenzhen outperformed.

Hong Kong managed a slight gain overnight as internet names were mixed and auto names were weak.

Short video platform Kuaishou reported Q3 earnings that came in slightly higher than estimates on the top line. The company generated revenue of RMB 31.3 billion ($4 billion) versus an estimated RMB 31.3 billion. The beat was primarily driven by online marketing services, which is a good indicator of the economy. Companies would not be spending on advertising if consumers were not prone to buying currently.

Shenzhen and Guangzhou eased real estate policies. This included a new push among local governments to buy up excess inventory to be converted to affordable housing. Real estate names were mixed as it remains unclear how these efforts will impact developers’ finances.

China left the 1 and 5-year loan prime rates (LPRs) unchanged. The decision was likely driven by recent cuts and recent weakness in the currency versus the US dollar since the election. The US dollar spike should be taken with a grain of salt, as we need to remember that Trump wants a lower dollar exchange rate to promote exports. This desire should also be evidence that tariff proposals are just a starting point for negotiation. Higher tariffs would inflate the value of the dollar.

Alibaba sold its first dollar bonds publicly in four years. The company offered a variety of USD bonds at a discount and RMB bonds at par. Alibaba will use the proceeds from the sale to finance share buybacks and general investments. Clearly, the company believes in its prospects! Tapping the bond market at the current time is interesting. Clearly, the company believes that bond investors will value it more favorably.

The Hang Seng and Hang Seng Tech indexes both closed higher by +0.21% and +0.41%, respectively. The top-performing sectors were Health Care, which gained +2.15%, Communication Services, which gained +1.27%, and Utilities, which gained +0.44%. Meanwhile, the worst-performing sectors were Financials, which fell -0.33%, Industrials, which fell -0.05%, and Consumer Staples, which gained +0.17%.

Shanghai, Shenzhen, and the STAR Board diverged to close +0.66%, +1.38%, and +0.45%, respectively. The top-performing sectors were Health Care, which gained +3.63%, Communication Services, which gained +1.12%, and Utilities, which gained +0.68%. Meanwhile, the worst-performing sectors were Industrials, which fell -0.26%, Consumer Discretionary, which fell -0.08%, and Consumer Staples, which fell -0.04%.

Last Night's Performance

Last Night’s Exchange Rates, Prices, & Yields

• CNY per USD 7.25 versus 7.24 yesterday
• CNY per EUR 7.63 versus 7.64 yesterday
• Yield on 10-Year Government Bond 2.10% versus 2.09% yesterday
• Yield on 10-Year China Development Bank Bond 2.16% versus 2.16% yesterday
• Copper Price +0.08%
• Steel Price +0.03%