I Love It When A Plan Comes Together
6 Min. Read Time
Key News
Asian equities had a strong day, as most markets rose more than 1% after US Treasury Secretary Scott Bessent, the US Trade Representative, and China’s Vice Premier He Lifeng reached a “preliminary consensus” following two days of negotiations.
The underlings have teed up an agreement for the big bosses Trump and Xi to sign on Thursday in South Korea. China’s Renminbi (CNY) rallied versus the US dollar to 7.10 per US dollar. In addition to easing trade tensions, another factor was the 15th Five Year Plan’s emphasis on AI, technological independence, and semiconductors, as growth stocks led gains in both Hong Kong and Mainland China.
Hong Kong volumes were higher, though not significantly, in an indication of the skepticism of trade talks, despite the China underweight in many portfolios. Hong Kong’s most heavily traded stocks were mega-cap growth stocks, led by Alibaba, which gained +3.15%, Tencent, which gained +2.90%, CATL, which gained +1.45%, and BYD, which gained +1.63%. Meanwhile, semiconductors outperformed, and non-ferrous metals rebounded (precious metals and metals and mining subsectors), due to reports saying that Mainland gold dealers will hike gold prices despite weakness in the spot price.
Biotech contract research organization WuXi AppTec gained +4.07% (2359 HK) in Hong Kong and +2.73% in Mainland China (603259 CH) on Q3 financial results that beat analyst expectations, with revenue up +15.3% year-over-year (YoY) and net income up +82.9% YoY.
Like in Hong Kong, growth stocks, sub-sectors, and stock exchanges all outperformed led by technology hardware, semiconductors, software, non-ferrous metals, and healthcare.
The 2025 Financial Street Forum kicked off, as PBOC President Pan Gongsheng, Li Yunze from the China Bank and Insurance Regulatory Commission (CBIRC), China Securities Regulatory Commission (CSRC) Chairman Wu Qing, and Foreign Exchange Administrator Zhu Hexin all gave keynote speeches. Gongsheng’s speech reiterated easy financial conditions, stating that the central bank will “…continue to adhere to a supportive monetary policy stance, implement appropriate loose monetary policies, comprehensively use various monetary policy tools, provide short-term, medium-term and long-term liquidity arrangements, and maintain relatively loose social financing conditions.”
The CBIRC head stated the agency will focus on “expanding domestic demand. We will strengthen the supply of funds for major projects and boost consumption expansion and upgrading. ”
China’s top government leaders met in the Great Hall of the People in Beijing as the 14th NPC Standing Committee met.
Industrial Profits increased in September, according to an official data release overnight, up +21.6% YoY, which brought the year-to-date (YTD) YoY increase to +3.2%, bolstered by a strong September move by high tech manufacturing, which increased +8.7% YoY. Not a factor in today’s trading but noteworthy.
Sunday’s New York Times Business Section included an article titled “Will Silicon Valley’s China Obsession Pay Off?” by Li Yuan. The article included this sentence: “Part of the reason American tech leaders amplify China’s capabilities, or its threat, is to pressure Washington into squeezing their Chinese peers with tariffs and regulation, and to win federal funding. By framing China’s rise as an existential challenge, they can push the government to pour money into their industries. The more they can alarm U.S. politicians and the public, the greater their leverage, and the more power they ultimately gain.” There are far more industries that this thesis could be applied to, other than technology, which ironically has many companies that are dependent on China for a good chunk of their revenue.
Today’s headline is from my favorite show growing up in the 1980’s: The A-Team. After finishing a successful mission, leader Colonel Hannibal Smith played by actor George Peppard, who says this line while chomping on his cigar.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1% |
| Hang Seng Tech | HSTECH Index | 1.8% |
| Hong Kong Turnover | HKTurn Index | -7.6% |
| Hong Kong Short Sale Turnover | HKSST Index | -17.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 13.9% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 366.91724137931 |
| China (Shanghai) | SHCOMP Index | 1.2% |
| China (Shenzhen) | SZCOMP Index | 1.3% |
| China (STAR Board) | Star50 Index | 4.4% |
| Mainland Turnover | .chturn Index | 20% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.2% |
| Japan | NKY Index | 2.5% |
| India | SENSEX Index | 0.7% |
| Indonesia | JCI Index | -1.9% |
| Malaysia | FBMKLCI Index | 0.3% |
| Pakistan | KSE100 Index | -0.8% |
| Philippines | PCOMP Index | -0.9% |
| South Korea | KOSPI Index | 2.6% |
| Taiwan | TWSE Index | 1.7% |
| Thailand | SET Index | 0.7% |
| Singapore | STI Index | 0.4% |
| Australia | AS51 Index | 0.4% |
| Vietnam | VNINDEX Index | -1.8% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 112 | 139 |
| Advancing Stocks | 350 | 3159 |
| Declining Stocks | 128 | 1785 |
| Outperforming Factors | Liquidity, EPS Revision, Growth | EPS Revision, Momentum, Liquidity |
| Underperforming Factors | Value | Value |
| Top Sectors | Communication Services, Materials, Consumer Discretionary | Information Technology, Materials, Utilities |
| Bottom Sectors | Real Estate, Consumer Staples, Financials | Real Estate, Consumer Staples, Communication Services |
| Top Subsectors | Semiconductors, Construction Materials, Software | Communication Equipment, Electronic Components, Computer Hardware |
| Bottom Subsectors | Household/Personal Products, Telecom | Soft Drink, Construction Machinery, Business Services |
| Southbound Connect Buys | Hua Hong Semi, SMIC, Tencent (Large), Li Auto, Pop Mart (Moderate) | N/A |
| Southbound Connect Sells | Alibaba (Large), Meituan, Xiaomi (Tiny) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 1.7 |
| Communication Services | 9 | 2.77 |
| Consumer Discretionary | 28 | 2.08 |
| Consumer Staples | 13 | 0.21 |
| Energy | 7 | 0.55 |
| Financials | 23 | 0.43 |
| Health Care | 13 | 1.39 |
| Industrials | 20 | 1.25 |
| Information Technology | 10 | 0.6 |
| Materials | 10 | 2.26 |
| Real Estate | 6 | -0.58 |
| Utilities | 12 | 0.92 |
| Mainland China Listed | 404 | 1.58 |
| Communication Services | 6 | 0.33 |
| Consumer Discretionary | 31 | 0.59 |
| Consumer Staples | 24 | 0.15 |
| Energy | 13 | 0.84 |
| Financials | 64 | 0.75 |
| Health Care | 31 | 0.98 |
| Industrials | 64 | 0.89 |
| Information Technology | 91 | 3.77 |
| Materials | 58 | 2.41 |
| Real Estate | 6 | 0.01 |
| Utilities | 16 | 1.7 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 2.9 |
| Alibaba HK | 9988 HK Equity | 3.1 |
| JD.com HK | 9618 HK Equity | 2.3 |
| NetEase HK | 9999 HK Equity | -0.3 |
| Yum China HK | 9987 HK Equity | -1.1 |
| Baozun HK | 9991 HK Equity | 3.1 |
| Baidu HK | 9888 HK Equity | 6.2 |
| Autohome HK | 2518 HK Equity | -0.3 |
| Bilibili HK | 9626 HK Equity | 1 |
| Trip.com HK | 9961 HK Equity | 0.6 |
| EDU HK | 9901 HK Equity | 1 |
| Xpeng HK | 9868 HK Equity | 1.9 |
| Weibo HK | 9898 HK Equity | -0.7 |
| Li Auto HK | 2015 HK Equity | -1.8 |
| Nio Auto HK | 9866 HK Equity | 4.5 |
| Zhihu HK | 2390 HK Equity | -0.1 |
| KE HK | 2423 HK Equity | -1.9 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0.1 |
| Meituan HK | 3690 HK Equity | 1.4 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 3.1 |
| XIAOMI CORP-CLASS B | -1.8 |
| SEMICONDUCTOR MANUFACTURI-H | 8 |
| TENCENT HOLDINGS LTD | 2.9 |
| HUA HONG SEMICONDUCTOR LTD-H | 13.7 |
| MEITUAN-CLASS B | 1.4 |
| POP MART INTERNATIONAL GROUP | -0.9 |
| LI AUTO INC-CLASS A | -1.8 |
| BAIDU INC-CLASS A | 6.2 |
| CSPC PHARMACEUTICAL GROUP LT | -3.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EOPTOLINK TECHNOLOGY INC L-A | 7.2 |
| ZHONGJI INNOLIGHT CO LTD-A | 12 |
| VICTORY GIANT TECHNOLOGY -A | 8 |
| CAMBRICON TECHNOLOGIES-A | 9 |
| FOXCONN INDUSTRIAL INTERNE-A | 5.1 |
| SUNGROW POWER SUPPLY CO LT-A | 7.5 |
| CONTEMPORARY AMPEREX TECHN-A | 2.5 |
| LUXSHARE PRECISION INDUSTR-A | 6.3 |
| CITIC SECURITIES CO-A | 0.4 |
| SEMICONDUCTOR MANUFACTURIN-A | 4.5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.11 versus 7.12 yesterday
- CNY per EUR 8.27 versus 8.28 yesterday
- Yield on 10-Year Government Bond 1.84% versus 1.85% yesterday
- Yield on 10-Year China Development Bank Bond 1.88% versus 1.92% yesterday
- Copper Price 1.23%
- Steel Price 0.75%
