Key News

Asian equities had a good day as fewer tariffs meant markets were up. India had a strong day following yesterday’s market holiday, Vietnam was off, and Thailand remained closed for the Songkran Festival.

Hong Kong and Mainland China bounced around the room, posting small gains, though expected US tariffs on semiconductors and pharmaceuticals weighed heavily on those subsectors along with technology hardware. Bloomberg News reported that China has stopped importing Boeing airplanes, according to “people familiar with the matter.” I’ve not seen this confirmed, but with China’s reciprocal tariffs, taking delivery and paying 2X makes no sense. I would recommend waiving the tariff to allow Boeing parts for the sake of Chinese airlines and their passengers!

After the close, Premier Li was in the headlines, stating that the government would “…expand domestic demand in all directions, calmly deal with the difficulties and challenges brought about by external shocks, and promote consumption, expand domestic demand….”.  I suspect markets want to see a more aggressive implementation of the RMB 2 trillion stimulus announced by the National People's Congress (NPC).

Sell-side economists like UBS and Société Générale have started to lower their 2025 GDP targets due to the impact of US tariffs. Domestic consumption plays have done decently, though more forceful action is needed. Hong Kong-listed internet stocks reflect an element of this domestic consumption focus, as the stocks were largely higher, led by Alibaba, up +1.85%, Tencent, up +0.44%, Meituan, up +0.62%, Kuaishou, up +1.69%, JD.com, which pulled an inverse James Bond to fall -0.07%, Trip.com, up +0.77%, and Baidu, up +0.06%.

Mainland investors bought $928 million worth of Hong Kong-listed stocks via Southbound Stock Connect, which accounted for 44% of Hong Kong's turnover. Mainland China lacked strong catalysts, though, at day’s end, China ETFs favored by the National Team experienced high volumes going into the lunch break and very high volumes into the market close. After the close, CATL gained +1.85% after the company reported Q1 results, with net income beating expectations and revenue a slight miss. President Xi left Vietnam for Malaysia.

Yesterday, I referenced a Hong Kong government official speaking about expediting Hong Kong listings from US-listed Chinese companies. It took some digging, but it was Hong Kong Financial Secretary Paul Chan on his blog where he stated, “Hong Kong has established a regulatory framework to facilitate companies listed overseas to conduct dual listing or second listing in Hong Kong. In response to the latest global changes, I have instructed the China Securities Regulatory Commission and the Hong Kong Stock Exchange to be prepared.” With the help of the Hong Kong Exchanges, we are monitoring the section of their website where relisting US listed companies will publicly file. Nothing overnight from Pinduoduo nor Full Truck Alliance.

The Hang Seng and Hang Seng Tech indexes diverged to close +0.23% and -0.67%, respectively, on volume that was down -26.96% from yesterday, which is 105% of the 1-year average. 194 stocks advanced, while 268 declined. Main Board short turnover decreased by -30.34% from yesterday, which is 107% of the 1-year average, as 16% of turnover was short turnover (Hong Kong short turnover includes ETF short volume, which is driven by market makers’ ETF hedging). Value and large capitalization stocks outperformed growth and small capitalization stocks. The top-performing sectors were Utilities, up +0.88%; Energy, up +0.73%; and Consumer Discretionary, up +0.72%. Meanwhile, the worst-performing sectors were Healthcare, which fell -1.04%; Real Estate, which fell -0.95%; and Information Technology, which fell -0.67%. The top-performing subsectors were consumer durables, apparel, consumer services, and household appliances. Meanwhile, semiconductors, national defense, and steel were among the worst-performing subsectors. Southbound Stock Connect volumes were 2X pre-stimulus September levels as Mainland investors bought a net $928 million worth of Hong Kong-listed stocks and ETFs, including China Mobile, Meituan, and Tencent, which were moderate net buys, Kuaishou, which was a small net buy, and Alibaba, SMIC, and Xiaomi, which were moderate net sells.

Shanghai, Shenzhen, and the STAR Board diverged to close +0.15%, -0.19%, and -0.78%, respectively, on volume that was down -15.91% from yesterday, which is 88% of the 1-year average. 1,884 stocks advanced, while 3,067 declined. Value and large capitalization stocks outperformed growth and small capitalization stocks. The top sectors were Financials, up +0.65%; Utilities, up +0.27%; and Communication Services, up +0.26%. Meanwhile, the worst-performing sectors were Information Technology, which fell -1.31%; Materials, which fell -0.99%; and Real Estate, which fell -0.81%. The top-performing subsectors were chemicals, soft drinks, and leisure products. Meanwhile, ports, aerospace, and chemical fibers were among the worst-performing subsectors. Northbound Stock Connect volumes were near the one-year average. CNY and the Asia Dollar Index both fell versus the US dollar. Treasury bonds were flat. Copper rose, and steel fell.

Last Night's Performance

Country/Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	0.2%
Hang Seng Tech	HSTECH Index	-0.7%
Hong Kong Turnover	HKTurn Index	-27%
HK Short Sale Turnover	HKSST Index	-30.3%
Short Turnover as a % of HK Turnovr	N/A	15.7%
Southbound Stock Connect Net Buy/Sell (US $ Millions)	928	184.9
China (Shanghai)	SHCOMP Index	0.1%
China (Shenzhen)	SZCOMP Index	-0.2%
China (STAR Board)	Star50 Index	-0.8%
Mainland Turnover	.chturn Index	-15.9%
Nouthbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	Not Available
Jing Daily China Global Luxury Index	CHINALUX Index	-0.5%
Japan	NKY Index	0.8%
India	SENSEX Index	2.1%
Indonesia	JCI Index	1.1%
Malaysia	FBMKLCI Index	0.4%
Pakistan	KSE100 Index	0.2%
Philippines	PCOMP Index	0.7%
South Korea	KOSPI Index	0.9%
Taiwan	TWSE Index	1.8%
Thailand	SET Index	-0.5%
Singapore	STI Index	2.1%
Australia	AS51 Index	0.2%
Vietnam	VNINDEX Index	-1.1%

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	151	0.29
Communication Services	9	0.21
Consumer Discretionary	28	0.72
Consumer Staples	13	0.14
Energy	7	0.72
Financials	23	0.37
Health Care	13	-1.04
Industrials	20	0.09
Information Technology	10	-0.67
Materials	10	-0.37
Real Estate	6	-0.95
Utilities	12	0.87
Mainland China Listed	404	-0.23
Communication Services	6	0.23
Consumer Discretionary	31	-0.44
Consumer Staples	24	0.1
Energy	13	-0.01
Financials	64	0.63
Health Care	31	-0.41
Industrials	64	-0.21
Information Technology	91	-1.32
Materials	58	-1
Real Estate	6	-0.82
Utilities	16	0.26

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	0.4
Alibaba HK	9988 HK Equity	1.6
JD.com HK	9618 HK Equity	-0.1
NetEase HK	9999 HK Equity	-1.4
Yum China HK	9987 HK Equity	-2
Baozun HK	9991 HK Equity	-0.2
Baidu HK	9888 HK Equity	0.1
Autohome HK	2518 HK Equity	-0.1
Bilibili HK	9626 HK Equity	-1.5
Trip.com HK	9961 HK Equity	0.8
EDU HK	9901 HK Equity	3.7
Xpeng HK	9868 HK Equity	-2.8
Weibo HK	9898 HK Equity	0.2
Li Auto HK	2015 HK Equity	-2.6
Nio Auto HK	9866 HK Equity	0.4
Zhihu HK	2390 HK Equity	-0.8
KE HK	2423 HK Equity	0.7
Tencent Music Entertainment HK	1698 HK Equity	1.9
Meituan HK	3690 HK Equity	0.6

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
ALIBABA GROUP HOLDING LTD	1.6
TENCENT HOLDINGS LTD	0.4
XIAOMI CORP-CLASS B	-0.2
SEMICONDUCTOR MANUFACTURING	-4.5
BYD CO LTD-H	-0.2
MEITUAN-CLASS B	0.6
KUAISHOU TECHNOLOGY	1.7
HONG KONG EXCHANGES & CLEAR	-1.7
JD.COM INC-CLASS A	-0.1
XPENG INC - CLASS A SHARES	-2.8

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
CONTEMPORARY AMPEREX TECHN-A	1.9
LUXSHARE PRECISION INDUSTR-A	-4.3
VICTORY GIANT TECHNOLOGY -A	5.7
BYD CO LTD -A	0.3
YONGHUI SUPERSTORES CO LTD-A	-0.5
NINGBO SHUANGLIN AUTO PART-A	10.7
CHINA GREATWALL TECHNOLOGY-A	-5.5
WANHUA CHEMICAL GROUP CO -A	-5.4
EAST MONEY INFORMATION CO-A	-0.8
BEINGMATE CO LTD-A	-1.3

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 7.31 versus 7.31 yesterday
• CNY per EUR 8.29 versus 8.28 yesterday
• Yield on 10-Year Government Bond 1.66% versus 1.66% yesterday
• Yield on 10-Year China Development Bank Bond 1.70% versus 1.71% yesterday
• Copper Price +0.25%
• Steel Price -0.16%