Key News

Asian equities had a strong day on light volumes, except the Philippines, which was closed for Maundy Thursday, also known as Holy Thursday, commemorating the Last Supper. Hong Kong and Stock Connect are closed tomorrow and Monday.

It was a fairly quiet night as Hong Kong rebounded by the same names that led it lower yesterday, with Hong Kong’s most heavily traded Alibaba +3.13%, Tencent +2.23% after announcing an effort to help foreign firms tap the domestic market, Xiaomi +1.7%, Meituan +1.19%, and SMIC -1.32%. A Mainland media piece titled “Taobao ranks first in downloads in 16 countries around the world” states that Alibaba’s Taobao is seeing large international interest as it is #1 in 16 countries and in the top ten in 123 countries.

Tencent also mentioned adding 28,000 interns over the next three years, surpassing our own ambitious intern program. The National Bureau of Statistics noted non-student age 16 to 24-year-olds living in urban areas saw the unemployment rate fell to 16.5% in March from 16.9% in February. The seasonality of construction and agriculture is a factor, as the NBS expects warmer temperatures to lower the rate.

Consumer plays including E-Commerce, hotels, restaurants, and travel/tourism were strong in Hong Kong with Mainland China’s week-long Labor Day holiday in May on the horizon, as Trip.com gained +3.07% and JD.com +0.58%. Yum China bucked the trend t close lower by -1.38%. Hong Kong had strong breadth with all sectors higher, but we would have liked to see heavier volumes as traders clearly headed out for the holiday early.

Mainland investors bought only $297 million worth of Hong Kong-listed stocks today, though Southbound Stock Connect accounted for 47% of trading. Real estate was a top-performing sector in both Hong Kong, where it gained +1.83%, and Mainland China, where it gained +2.17% after yesterday’s real estate data release, showing that 24 of the top 70 cities had YoY gains in new home prices.

There is chatter that the 5-year loan prime rate will be lowered next month, which is what mortgages are based on. Mainland China managed small gains on light volumes, as three of the five National Team’s favored ETFs had very strong volumes at the close, indicating support. Autos were off though I did not see a culprit for this. Consumer plays, including Kweichow Moutai, which gained +0.69%, and Wuliangye Yibin, which gained +0.17%, had a good day, along with value plays, such as banks, energy, and insurance. Not exactly animal spirits, unfortunately, as investors are looking for the Chinese government to push the stimulus gas pedal further.

After the close, it was reported that the Ministry of Finance will issue RMB 71B of 30-year special Treasury bonds and RMB 50B of 20-year special Treasury bonds. The NPC’s RMB 2 trillion worth of stimulus included special bond issuance with proceeds geared to consumption subsidies and real estate.

Did you know Shanghai-based tea maker Chagee Holdings is going public today on the Nasdaq? But I thought Chinese ADRs were going to be delisted! According to ChatGPT, anchoring is “a cognitive bias where people rely too heavily on the first piece of information they receive (the 'anchor') when making decisions or judgments.” When we hear about potential US shares, also known as American depositary receipts (ADRs), being delisted, our brain immediately remembers the Executive Order used to delist the three China telecom ADRs in January 2021 or what happened to Russian securities post Ukraine invasion. Our brain “thinks fast” by saying that’s what will happen again. During his Senate confirmation, the incoming head of the SEC was asked if he would look to ensure Chinese-listed companies adhere to US law, and he answered yes. This has become front-page news with little to no examination of whether the companies are doing anything wrong. His statement just reiterates the existing policy.

Are the companies adhering to US rules? YES! Go to www.sec.gov/hfcaa and you’ll see the SEC says so themselves. Unfortunate to see the gasoline thrown on this fire. Of course, I can’t predict the future, though why would the SEC vaporize $800B of US investor capital? US and not Chinese investors own the stocks. Anything negative about China is fair game. Think about China and Taiwan. It has been 27,740 days without an invasion (2025 minus 1949 = 76 years multiplied by 365). 0 for 27,740. I was thinking about this due to another cognitive bias I am seeing, “groupthink,” which ChatGPT greatly defines: “Groupthink happens when a group prioritizes harmony, conformity, and consensus over critical evaluation of ideas.” The one positive thing coming is that the bond and equity markets are forcing people to look at facts and data, which is refreshing.

Last Night's Performance

Country/Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	1.6%
Hang Seng Tech	HSTECH Index	1.9%
Hong Kong Turnover	HKTurn Index	-12.5%
HK Short Sale Turnover	HKSST Index	-16.7%
Short Turnover as a % of HK Turnovr	N/A	14.9%
Southbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	230.5
China (Shanghai)	SHCOMP Index	0.1%
China (Shenzhen)	SZCOMP Index	0.1%
China (STAR Board)	Star50 Index	0.2%
Mainland Turnover	.chturn Index	-10%
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	1.3%
India	SENSEX Index	2%
Indonesia	JCI Index	0.6%
Malaysia	FBMKLCI Index	0.4%
Pakistan	KSE100 Index	1%
Philippines	PCOMP Index	-0.8%
South Korea	KOSPI Index	0.9%
Taiwan	TWSE Index	-0.7%
Thailand	SET Index	0.2%
Singapore	STI Index	1.6%
Australia	AS51 Index	0.8%
Vietnam	VNINDEX Index	0.6%

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	151	1.75
Communication Services	9	2.41
Consumer Discretionary	28	2.07
Consumer Staples	13	0.9
Energy	7	0.88
Financials	23	1.14
Health Care	13	0.84
Industrials	20	0.62
Information Technology	10	1.69
Materials	10	0.31
Real Estate	6	1.84
Utilities	12	0.74
Mainland China Listed	404	0.22
Communication Services	6	-0.1
Consumer Discretionary	31	-0.74
Consumer Staples	24	0.8
Energy	13	0.11
Financials	64	0.32
Health Care	31	0.25
Industrials	64	0.27
Information Technology	91	0.24
Materials	58	-0.14
Real Estate	6	2.18
Utilities	16	-0.09

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	2.2
Alibaba HK	9988 HK Equity	3.1
JD.com HK	9618 HK Equity	0.6
NetEase HK	9999 HK Equity	4.6
Yum China HK	9987 HK Equity	-1.4
Baozun HK	9991 HK Equity	-0.3
Baidu HK	9888 HK Equity	2.5
Autohome HK	2518 HK Equity	-1.1
Bilibili HK	9626 HK Equity	2
Trip.com HK	9961 HK Equity	3.1
EDU HK	9901 HK Equity	4
Xpeng HK	9868 HK Equity	0.3
Weibo HK	9898 HK Equity	1.3
Li Auto HK	2015 HK Equity	3.3
Nio Auto HK	9866 HK Equity	3
Zhihu HK	2390 HK Equity	1.1
KE HK	2423 HK Equity	4.1
Tencent Music Entertainment HK	1698 HK Equity	1.3
Meituan HK	3690 HK Equity	1.2

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
ALIBABA GROUP HOLDING LTD	3.1
TENCENT HOLDINGS LTD	2.2
XIAOMI CORP-CLASS B	1.7
MEITUAN-CLASS B	1.2
SEMICONDUCTOR MANUFACTURING	1.3
CHIFENG JILONG GOLD MINING-H	-4.8
HONG KONG EXCHANGES & CLEAR	1.2
POP MART INTERNATIONAL GROUP	3.3
CHINA CONSTRUCTION BANK-H	1.8
AIA GROUP LTD	2.8

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
ZIJIN MINING GROUP CO LTD-A	0.5
CHIFENG JILONG GOLD MINING-A	-3.7
CAMBRICON TECHNOLOGIES-A	4.8
SHANGHAI BELLING CO LTD-A	4.6
SERES GROUP CO L-A	-3.9
TALKWEB INFORMATION SYSTEM-A	10
BEINGMATE CO LTD-A	-0.1
KWEICHOW MOUTAI CO LTD-A	0.7
CONTEMPORARY AMPEREX TECHN-A	0.5
YONGHUI SUPERSTORES CO LTD-A	-3.2

Last Night's Exchange Rates, Prices, & Yields

• CNY per USD 7.29 versus 7.30 yesterday
• CNY per EUR 8.29 versus 8.29 yesterday
• Yield on 10-Year Government Bond 1.65% versus 1.64% yesterday
• Yield on 10-Year China Development Bank Bond 1.69% versus 1.68% yesterday
• Copper Price +0.38%
• Steel Price -0.16%