Mainland Stock Market Cap Hits 10-Year High
5 Min. Read Time
Key News
Asian equities started the week mixed as Shenzhen and Mainland China-listed growth stocks outperformed, while South Korea, Singapore, and Thailand underperformed and Indonesia was closed for Independence Day.
The total value of Mainland China's stock market (i.e., Shanghai and Shenzhen) exceeded RMB 100 trillion for the first time ever, as today’s volume was 190% of the 1-year average. Mainland and Hong Kong-listed brokerage stocks, not surprisingly, had a strong day. Mainland China experienced a very broad rally, led by growth stocks and small caps, as the STAR Board gained +2.14% versus the Shanghai, which gained +0.85%.
Hong Kong was slightly more mixed, though growth stocks and subsectors saw gains, including Alibaba, which gained +0.42%, JD.com, which gained +2.65%, and Trip.com, which gained +1.80%. However, Tencent fell -0.84% and Contemporary Amperex Technology (CATL) fell -0.43%.
Alibaba will announce its second quarter financial results after the close in Hong Kong on Friday, August 29th. Friday earnings releases always make me a bit nervous, especially considering that the release will be during a three-day weekend in the US.
Hong Kong-listed value stocks had a rough day, as banks, oil, metals & mining, and REITs were all off.
A Mainland media headline announced that China’s bond market “collapsed”, which is a massive exaggeration, though local investors are clearly rebalancing an element of their savings from bonds to stocks, as China’s 10 Year Treasury price was RMB 99.32 versus the June 17th high of RMB 100.33. The 10-year Treasury Yield is now 1.79% versus the year-to-date (YTD) low of 1.59% on January 6th.
Over the weekend, The Economic Observer noted that the Mainland market might be entering a “structural revaluation process”, driven by the “dual recovery channel of “profit and valuation”, as consumption recovers, driving profits higher.
Today’s big news item post close was that Premier Li and the State Council held the Ninth Plenary Meeting, focused on how to “…consolidate and expand the momentum of economic recovery and improvement and strive to complete the annual economic and social development goals and tasks.” While acknowledging economic challenges, the State Council said it will “continuously stimulate consumption potential”, grow “service consumption and new consumption”, and “Take effective measures to consolidate the trend of stopping the decline and stabilizing the real estate market.” It is hard not to notice the emphasis on consumption, right?
Zhejiang province coincidentally announced the "Three-Year Action Plan to Accelerate the Development of the First Store Economy (2025-2027)" comprised of 50 store clusters with 2,000 stores of which 200 being “high-level”. Meanwhile, Hubei Province announced retail sales of consumer goods increased +6.2% year-over-year (YoY) YTD, led by sales of household appliances, which increased +72.2%, smart appliances, which increased +42.3%, and furniture, which increased +62.6%. The Chongqing Municipal Commission of Commerce announced the replacement of its auto subsidy with another RMB 300 million after buyers used up the initial RMB 300 million allocated.
Unitree won eleven medals in the World Humanoid Robot Games, followed by X-Humanoid’s ten medals.
Mainland media noted that a US trip to India to negotiate a trade deal has been cancelled.
Are you worried that you missed the China rally? US-listed China equity ETF flows are still at a net outflow of -845 million, YTD.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.4% |
| Hang Seng Tech | HSTECH Index | 0.6% |
| Hong Kong Turnover | HKTurn Index | 0% |
| Hong Kong Short Sale Turnover | HKSST Index | -30.5% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.5% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 177.061685823755 |
| China (Shanghai) | SHCOMP Index | 0.8% |
| China (Shenzhen) | SZCOMP Index | 1.8% |
| China (STAR Board) | Star50 Index | 2.1% |
| Mainland Turnover | .chturn Index | 23.2% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0% |
| Japan | NKY Index | 0.8% |
| India | SENSEX Index | 0.8% |
| Indonesia | JCI Index | -0.4% |
| Malaysia | FBMKLCI Index | 0.5% |
| Pakistan | KSE100 Index | 1.2% |
| Philippines | PCOMP Index | -0.4% |
| South Korea | KOSPI Index | -1.5% |
| Taiwan | TWSE Index | 0.6% |
| Thailand | SET Index | -1.4% |
| Singapore | STI Index | -1% |
| Australia | AS51 Index | 0.2% |
| Vietnam | VNINDEX Index | 0.4% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume as % of 1-Year Average | 143 | 190 |
| Advancing Stocks | 249 | 3790 |
| Declining Stocks | 228 | 1159 |
| Outperforming Factors | Momentum, EPS Revisions, Growth | Liquidity, Growth, Momentum |
| Underperforming Factors | Dividend Yield, Value, Low Volatility | Value |
| Top Sectors | Healthcare, Discretionary, Staples | Communication, Tech, Discretionary |
| Bottom Sectors | Energy, Real Estate, Materials | Real Estate, Materials |
| Top Subsectors | National Defense, Consumer Staples Distribution, Consumer Durables/Apparel | Communication Equipment, Software, Cultural Media |
| Bottom Subsectors | Coal, Non Ferrous Metal, Semis | Precious Metals, Motorcycle, Construction Machinery |
| Southbound Connect Buys | Alibaba (Moderate), East Buy, Hua Hong, SMIC, Tencent (Small) | N/A |
| Southbound Connect Sells | HK Tracker ETF (Very Large), Xiaomi (Small), Meituan (Tiny) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 0.16 |
| Communication Services | 9 | -0.43 |
| Consumer Discretionary | 28 | 1.09 |
| Consumer Staples | 13 | 0.81 |
| Energy | 7 | -2.05 |
| Financials | 23 | -0.18 |
| Health Care | 13 | 1.36 |
| Industrials | 20 | 0.47 |
| Information Technology | 10 | 0.58 |
| Materials | 10 | -1.44 |
| Real Estate | 6 | -1.9 |
| Utilities | 12 | -0.44 |
| Mainland China Listed | 404 | 0.95 |
| Communication Services | 6 | 2.78 |
| Consumer Discretionary | 31 | 1.4 |
| Consumer Staples | 24 | 0.53 |
| Energy | 13 | 0.19 |
| Financials | 64 | 0.76 |
| Health Care | 31 | 0.23 |
| Industrials | 64 | 0.55 |
| Information Technology | 91 | 2.57 |
| Materials | 58 | -0.03 |
| Real Estate | 6 | -0.46 |
| Utilities | 16 | 0.15 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.8 |
| Alibaba HK | 9988 HK Equity | 0.4 |
| JD.com HK | 9618 HK Equity | 2.6 |
| NetEase HK | 9999 HK Equity | 2 |
| Yum China HK | 9987 HK Equity | -0.5 |
| Baozun HK | 9991 HK Equity | 1.6 |
| Baidu HK | 9888 HK Equity | 1 |
| Autohome HK | 2518 HK Equity | 1.2 |
| Bilibili HK | 9626 HK Equity | 2.1 |
| Trip.com HK | 9961 HK Equity | 1.8 |
| EDU HK | 9901 HK Equity | 0.4 |
| Xpeng HK | 9868 HK Equity | 1.4 |
| Weibo HK | 9898 HK Equity | 2.5 |
| Li Auto HK | 2015 HK Equity | 1.2 |
| Nio Auto HK | 9866 HK Equity | 7 |
| Zhihu HK | 2390 HK Equity | 5.1 |
| KE HK | 2423 HK Equity | -0.7 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1 |
| Meituan HK | 3690 HK Equity | -0.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -0.8 |
| ALIBABA GROUP HOLDING LTD | 0.4 |
| XIAOMI CORP-CLASS B | 0.4 |
| HUA HONG SEMICONDUCTOR LTD-H | -6.2 |
| MEITUAN-CLASS B | -0.2 |
| SEMICONDUCTOR MANUFACTURI-H | -1.8 |
| CHINA LIFE INSURANCE CO-H | 2.9 |
| SENSETIME GROUP INC-CLASS B | 5.2 |
| BYD CO LTD-H | 0.8 |
| POP MART INTERNATIONAL GROUP | 4.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EAST MONEY INFORMATION CO-A | 4.1 |
| BEIJING COMPASS TECHNOLOGY-A | 14.6 |
| ZTE CORP-A | 8.8 |
| EOPTOLINK TECHNOLOGY INC L-A | 4.8 |
| HITHINK ROYALFLUSH INFORMA-A | 10.3 |
| ZHONGJI INNOLIGHT CO LTD-A | 9.2 |
| CHINA NORTHERN RARE EARTH -A | 10 |
| FOXCONN INDUSTRIAL INTERNE-A | -0.9 |
| CITIC SECURITIES CO-A | 1.9 |
| WOLONG ELECTRIC GROUP CO L-A | 8 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.18 versus 7.18 yesterday
- CNY per EUR 8.39 versus 8.41 yesterday
- Yield on 10-Year Government Bond 1.78% versus 1.75% yesterday
- Yield on 10-Year China Development Bank Bond 1.91% versus 1.86% yesterday
- Copper Price 0.08%
- Steel Price -0.31%
