Year Of The Dragon Slayed The Bears
4 Min. Read Time
Key News
It was a quiet night as DeepSeek was by far the topic du jour in the region, though Mainland China (closed until next Wednesday), Indonesia (closed until Thursday), Malaysia (closed until Friday), and Taiwan (closed until next Monday) were closed for Chinese New Year while South Korea is closed until Friday for Korean New Year.
Hong Kong (closed until next Monday) posted a small gain in a half-day on light volumes, led by internet stocks: Tencent up +1.42%, Xiaomi up +3.23%, Alibaba up +1.2%, Meituan down -1%, Baidu up +3.6%, and JD.com down -0.25% after the company announced that it will buy local retail and delivery company Dada Nexus (DADA US) for $2 a share.
DeepSeek’s effect could be felt as utilities and related energy production stocks and subsectors, such as nuclear energy and materials, were weak as AI-driven energy needs may not be as high as anticipated. A Mainland reporter asked DeepSeek how to outperform in the A-shares market. The response was to buy leading companies benefiting from policy support with strong fundamentals and technicals. The fall in US technology stocks was a significant focus, indicating the exposure in the region.
Distressed SOE developer Vanke gained +2.12% as Shenzhen Metro Chairman Xin Jie was named the Chairman of the Board after the company’s CEO resigned. There is an argument that Shenzhen’s local government is taking over and backstopping the company. Interestingly, the idea of nationalizing the property developers might be necessary based on our China/Hong Kong trip. A Mainland media source said that in January, thus far, new home sales had increased by +33% year-over-year in the twenty largest cities. India and China agreed to start direct flights again.
The Year of the Dragon is over! The 1-year/January 26, 2024, to January 28, 205 return for the Hang Seng was +33%, while the Hang Seng Tech gained +50%, though technically, the Year of Dragon didn’t start until mid-February last year. Regardless, the returns are much better than most investors realize. Higher highs and higher lows are an uptrend! Hopefully that trend continues in the Year of the Snake.
The Hang Seng and Hang Seng Tech indexes gained +0.14% and +0.77%, respectively, on volume down -64.93% from yesterday, which is 38% of the 1-year average. 172 stocks advanced, while 306 declined. Main Board short turnover decreased by -65.43% from yesterday, which is 37% of the 1-year average, as 15% was short turnover (Hong Kong short turnover includes ETF short volume, which is driven by market makers’ ETF hedging). Growth and small capitalization stocks outperformed value and large capitalization stocks. The top sectors were technology, up +2.12%, consumer staples, up +1.58%, and communication services, up +1.49%, while materials fell -2.55%, financials fell -1.04%, and energy fell -1.03%. The top sub-sectors were consumer staples, household/personal products, and technology hardware, while national defense, nonferrous metals, and coal were the worst performers. Southbound Stock Connect was closed.
Shanghai, Shenzhen, and STAR Board were closed.
Last Night's Performance
"| Country/Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.1% |
| Hang Seng Tech | HSTECH Index | 0.8% |
| Hong Kong Turnover | HKTurn Index | -64.9% |
| HK Short Sale Turnover | HKSST Index | -65.4% |
| Short Turnover as a % of HK Turnovr | N/A | 15.2% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1053.6 |
| China (Shanghai) | SHCOMP Index | Closed |
| China (Shenzhen) | SZCOMP Index | Closed |
| China (STAR Board) | Star50 Index | Closed |
| Mainland Turnover | .chturn Index | Closed |
| Nouthbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0% |
| Japan | NKY Index | -1.4% |
| India | SENSEX Index | 0.7% |
| Indonesia | JCI Index | -0.9% |
| Malaysia | FBMKLCI Index | -0.4% |
| Pakistan | KSE100 Index | -1.2% |
| Philippines | PCOMP Index | -0.7% |
| South Korea | KOSPI Index | 0.8% |
| Taiwan | TWSE Index | 1% |
| Thailand | SET Index | 0.4% |
| Singapore | STI Index | 0.1% |
| Australia | AS51 Index | -0.1% |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 152 | 0.35 |
| Communication Services | 9 | 1.5 |
| Consumer Discretionary | 30 | 0.18 |
| Consumer Staples | 13 | 1.58 |
| Energy | 7 | -1.03 |
| Financials | 23 | -1.04 |
| Health Care | 13 | 0.57 |
| Industrials | 19 | 0.22 |
| Information Technology | 10 | 2.13 |
| Materials | 10 | -2.55 |
| Real Estate | 6 | 0.19 |
| Utilities | 12 | -0.79 |
| Mainland China Listed | 432 | 0 |
| Communication Services | 9 | 0 |
| Consumer Discretionary | 31 | 0 |
| Consumer Staples | 27 | 0 |
| Energy | 16 | 0 |
| Financials | 63 | 0 |
| Health Care | 40 | 0 |
| Industrials | 69 | 0 |
| Information Technology | 85 | 0 |
| Materials | 68 | 0 |
| Real Estate | 7 | 0 |
| Utilities | 17 | 0 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.4 |
| Alibaba HK | 9988 HK Equity | 1.2 |
| JD.com HK | 9618 HK Equity | -0.3 |
| NetEase HK | 9999 HK Equity | 1.7 |
| Yum China HK | 9987 HK Equity | -1.2 |
| Baozun HK | 9991 HK Equity | 1.4 |
| Baidu HK | 9888 HK Equity | 3.6 |
| Autohome HK | 2518 HK Equity | 2 |
| Bilibili HK | 9626 HK Equity | 1.1 |
| Trip.com HK | 9961 HK Equity | -0.5 |
| EDU HK | 9901 HK Equity | 3.7 |
| Xpeng HK | 9868 HK Equity | 1.5 |
| Weibo HK | 9898 HK Equity | 1.5 |
| Li Auto HK | 2015 HK Equity | -0.1 |
| Nio Auto HK | 9866 HK Equity | 0 |
| Zhihu HK | 2390 HK Equity | -0.1 |
| KE HK | 2423 HK Equity | 1.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0 |
| Meituan HK | 3690 HK Equity | -1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| SEMICONDUCTOR MANUFACTURING | -0.4 |
| TENCENT HOLDINGS LTD | 1.4 |
| MEITUAN-CLASS B | -1 |
| ALIBABA GROUP HOLDING LTD | 1.2 |
| XIAOMI CORP-CLASS B | 3.2 |
| JD.COM INC-CLASS A | -0.3 |
| PING AN INSURANCE GROUP CO-H | -0.9 |
| BYD CO LTD-H | -0.7 |
| CNOOC LTD | -1.3 |
| NEW ORIENTAL EDUCATION & TEC | 3.7 |
Last Night’s Exchange Rates, Prices, & Yields
CLOSED
