Key News

Asian equities were mixed following President Trump’s Mexico-Canada tariff talk, which strengthened the US dollar overnight. Taiwan, Thailand, and Indonesia underperformed. 

Hong Kong and Mainland China bounced around the room in a choppy session, though volumes were very high, which has become the new normal. It was another strong day of Mainland investors buying Hong Kong via Southbound Stock Connect with $2.173B of net buying, as Alibaba and the Hong Kong Tracker ETF saw very large net inflows. Tencent, Semiconductor Manufacturing International (SMIC), and Meituan were also large net buys.

Xiaomi fell -5.68% despite announcing a new high-end sedan costing $112,000 in a very volatile day, opening +4.26% and hitting an intra-day low of -8.7%. Xiaomi traded 832 million shares today versus the 1-year average of 145 million shares, as the value of volume in Hong Kong was $45 billion, which is 8X what the most heavily traded stock would trade pre-September stimulus.

Alibaba fell -0.88% and Tencent fell -1.22% after trading HKD 24 billion and HKD 19 billion, respectively. There was a bit of the revenge of the nerds in both Hong Kong and China as recent tech and growth stocks underperformed while old-school value plays outperformed.

Auto was a bright spot in Hong Kong, as BYD gained +2.26%, Geely gained +6.03%, Great Wall Motors gained +7.36%, and XPeng gained +6.18%. Baidu fell -1.24% despite announcing an autonomous driving partnership with CATL, which gained +0.51%.

Tomorrow, the National Bureau of Statistics (NBS) will release February “official” Manufacturing and Non-Manufacturing PMIs. In China, recent outperformers such as electronic devices, communication, and computers underperformed, while household appliances, banks, and energy outperformed.

It was a pretty quiet night from a news perspective, though there is a pre-Dual Session press conference tomorrow.

The Hang Seng and Hang Seng Tech indexes fell -0.29% and -1.22%, respectively, on volume that increased +9.82% from yesterday, which is 268% of the 1-year average. 294 stocks advanced, while 192 declined. Main Board short turnover increased by +36.9% from yesterday, which is 316% of the 1-year average, as 18% of turnover was short turnover (Hong Kong short turnover includes ETF short volume, which is driven by market makers’ ETF hedging). The growth factor and small caps outperformed the value factor and large caps. The top-performing sectors were Real Estate, which gained +1.58%, Consumer Staples, which gained +1.20%, and Health Care, which gained +0.47%. Meanwhile, the worst-performing sectors were Information Technology, which fell -4.34%, Communication Services, which fell -1.44%, and Energy, which fell -0.59%. The top-performing subsectors were household appliances, telecom, and construction materials. Meanwhile, media, technology hardware, and national defense were the worst. Southbound Stock Connect volumes were 10x pre-stimulus levels as Mainland investors bought $2.173B of Hong Kong stocks and ETFs led by Alibaba and Hong Kong Tracker ETF. Tencent, SMIC, and Meituan were large net buys, while Li Auto, Xpeng, and Xiaomi were very small net buys.

Shanghai, Shenzhen, and STAR Board diverged to close +0.23%, -0.26%, and -0.05%, respectively, on volume that increased +3.42% from yesterday, which is 174% of the 1-year average. 1,966 stocks advanced, while 3,007 declined. The value factor and large caps outperformed the growth factor and small caps. The top-performing sectors were Consumer Staples, which gained +1.37%, Real Estate, which gained +0.52%, and Consumer Discretionary, which gained +0.43%. Meanwhile, the worst-performing sectors were Communication Services, which fell -2.26%, Information Technology, which fell -2.05%, and Utilities, which fell -0.77%. The top-performing subsectors were retail, chemicals, and leisure products. Meanwhile, communication equipment, computer hardware, and telecom were among the worst-performing subsectors. Northbound Stock Connect volumes were above average. CNY and the Asia Dollar Index fell versus the US dollar. Treasury bond prices fell. Copper and steel rose.

Last Night's Performance

Country/Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	-0.3%
Hang Seng Tech	HSTECH Index	-1.2%
Hong Kong Turnover	HKTurn Index	9.8%
HK Short Sale Turnover	HKSST Index	36.9%
Short Turnover as a % of HK Turnovr	N/A	18%
Southbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	0
China (Shanghai)	SHCOMP Index	0.2%
China (Shenzhen)	SZCOMP Index	-0.3%
China (STAR Board)	Star50 Index	0%
Mainland Turnover	.chturn Index	3.4%
Nouthbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	Not Available
Jing Daily China Global Luxury Index	CHINALUX Index	-0.8%
Japan	NKY Index	0.3%
India	SENSEX Index	0%
Indonesia	JCI Index	-1.8%
Malaysia	FBMKLCI Index	-0.1%
Pakistan	KSE100 Index	-0.1%
Philippines	PCOMP Index	-0.3%
South Korea	KOSPI Index	-0.7%
Taiwan	TWSE Index	-1.5%
Thailand	SET Index	-1.3%
Singapore	STI Index	0.3%
Australia	AS51 Index	0.3%
Vietnam	VNINDEX Index	0.4%

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	152	-0.76
Communication Services	9	-1.43
Consumer Discretionary	30	-0.13
Consumer Staples	13	1.2
Energy	7	-0.59
Financials	23	-0.35
Health Care	13	0.48
Industrials	19	0.42
Information Technology	10	-4.34
Materials	10	-0.34
Real Estate	6	1.59
Utilities	12	0.24
Mainland China Listed	432	-0.17
Communication Services	9	-2.23
Consumer Discretionary	31	0.46
Consumer Staples	27	1.39
Energy	16	-0.14
Financials	63	0.28
Health Care	40	0.07
Industrials	69	0.13
Information Technology	85	-2.01
Materials	68	-0.23
Real Estate	7	0.55
Utilities	17	-0.74

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	-1.2
Alibaba HK	9988 HK Equity	-0.9
JD.com HK	9618 HK Equity	-0.5
NetEase HK	9999 HK Equity	-2
Yum China HK	9987 HK Equity	1.6
Baozun HK	9991 HK Equity	0.2
Baidu HK	9888 HK Equity	-1.2
Autohome HK	2518 HK Equity	1.1
Bilibili HK	9626 HK Equity	-4.8
Trip.com HK	9961 HK Equity	-4.7
EDU HK	9901 HK Equity	0.7
Xpeng HK	9868 HK Equity	6.2
Weibo HK	9898 HK Equity	-2.3
Li Auto HK	2015 HK Equity	-0.7
Nio Auto HK	9866 HK Equity	6.5
Zhihu HK	2390 HK Equity	-0.4
KE HK	2423 HK Equity	-1.5
Tencent Music Entertainment HK	1698 HK Equity	-5.4
Meituan HK	3690 HK Equity	-0.8

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
XIAOMI CORP-CLASS B	-5.7
ALIBABA GROUP HOLDING LTD	-0.9
TENCENT HOLDINGS LTD	-1.2
SEMICONDUCTOR MANUFACTURING	0.7
MEITUAN-CLASS B	-0.8
BYD CO LTD-H	2.3
HONG KONG EXCHANGES & CLEAR	1.1
LI AUTO INC-CLASS A	-0.7
XPENG INC - CLASS A SHARES	6.2
KUAISHOU TECHNOLOGY	-3.3

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
EAST MONEY INFORMATION CO-A	-1.7
TALKWEB INFORMATION SYSTEM-A	-10
HANGZHOU IRON & STEEL CO-A	10
ZTE CORP-A	-4.3
HYGON INFORMATION TECHNOLO-A	5.8
ZHEJIANG SANHUA INTELLIGEN-A	2.1
KWEICHOW MOUTAI CO LTD-A	1.7
SEMICONDUCTOR MANUFACTURIN-A	2.7
GREATOO INTELLIGENT EQUIPM-A	0.4
CHINA GALAXY SECURITIES CO-A	10

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 7.28 versus 7.26 yesterday
• CNY per EUR 7.60 versus 7.61 yesterday
• Yield on 10-Year Government Bond 1.76% versus 1.73% yesterday
• Yield on 10-Year China Development Bank Bond 1.75% versus 1.69% yesterday
• Copper Price +0.27%
• Steel Price +0.12%