The Social Security Fund Increased Technology Exposure By 60%: Have You?
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Key News
Asian equities were mixed overnight, as Mainland China, Hong Kong, and South Korea all outperformed.
Both Hong Kong and Mainland China bounced around the room until a late-afternoon rip higher by the growth stocks and subsectors that investors had been unloading for several days prior. As we talked about yesterday, both markets have declined since October, despite the renminbi (CNY) appreciating against the US dollar.
A widely sourced catalyst was the afternoon report that distressed state-owned developer Vanke proposed paying creditors for twelve months, i.e. kicking the can, on a payment due two days ago.
Another factor that had been absent over the last month but reappeared today was Mainland investors buying a net $1.02 billion worth of Hong Kong-listed stocks via Southbound Stock Connect. Mainland-listed ETFs favored by the National Team saw above-average trading volumes in an indication that indices had reached a level support that should be bought. The ETF volumes were not exceedingly high, but above the 30-day average.
The State Administration for Market Regulation (SAMR) issued a press release and held a press conference on the "Draft Anti-Monopoly Compliance Guidelines for Internet Platforms”. The release emphasized the rights of merchants versus excessive competition.
I suspect the real catalyst for today’s rally was the release of the third-quarter holdings of the Social Security Fund, although I am not aware of the specific timing of the release. The release showed a significant increase in technology exposure in electronics, communication, computer hardware, and media, as tech holdings increased to RMB 46.9 billion, a 61% year-over-year (YoY) increase. I suspect they also read the draft of the 15th Five-Year Plan, which emphasized domestic consumption and tech self-reliance.
Tencent gained +1.42% after naming former OpenAI researcher Vince Yao as the head of AI reporting to President Lau and organizing the company’s AI efforts.
All sectors that had been sidelined in the last few days rebounded strongly, including internet, non-ferrous metals, insurance, semiconductors, and technology hardware. Mainland China also rebounded, led by technology hardware, communication equipment, insurance, non-ferrous metals, biotech, and electrical equipment.
Polycrystalline silicon futures gained +4.36% overnight, lifting Sungrow higher by +3.37% and LONGi by +1.83%.
Today’s absurd Mainland IPO was graphics processing unit chip maker Meta X Integrated (688802 CH), which gained +692% after raising $585 million on an oversubscription of 2,986 times. Similar to Moore Threads, the company is not profitable; however, the IPO's limited access feature served as rocket fuel, giving the company a market cap of $47 billion.
The Central Financial Affairs Commission reiterated domestic consumption is the top priority in 2026, a not-so-subtle reminder to investors.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.9% |
| Hang Seng Tech | HSTECH Index | 1% |
| Hong Kong Turnover | HKTurn Index | -9.1% |
| Hong Kong Short Sale Turnover | HKSST Index | -1.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 20.7% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1,010.15 |
| China (Shanghai) | SHCOMP Index | 1.2% |
| China (Shenzhen) | SZCOMP Index | 1.7% |
| China (STAR Board) | Star50 Index | 2.5% |
| Mainland Turnover | .chturn Index | 4.6% |
| 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 | 0.3% |
| India | SENSEX Index | -0.1% |
| Indonesia | JCI Index | -0.1% |
| Malaysia | FBMKLCI Index | -0.4% |
| Pakistan | KSE100 Index | 0% |
| Philippines | PCOMP Index | 0.4% |
| South Korea | KOSPI Index | 1.4% |
| Taiwan | TWSE Index | 0% |
| Thailand | SET Index | -0.3% |
| Singapore | STI Index | -0.1% |
| Australia | AS51 Index | -0.2% |
| Vietnam | VNINDEX Index | -0.3% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 73 | 100 |
| Advancing Stocks | 314 | 3460 |
| Declining Stocks | 157 | 1496 |
| Outperforming Factors | Liquidity, Momentum, EPS Revision | Momentum, EPS Revision, Liquidity |
| Underperforming Factors | Value | Value |
| Top Sectors | Industrials, Consumer Staples, Real Estate | Utilities, Information Technology, Consumer Discretionary |
| Bottom Sectors | Energy, Consumer Discretionary, Information Technology | Energy, Communication Services, Consumer Staples |
| Top Subsectors | Consumer Durables/Apparel, Non Ferrous Metals, Semis | Communication Equipment, Fertilizer, Electronic Components |
| Bottom Subsectors | Environmental Protection, National Defense, Commercial/Professional Services | Forest, Water, Aerospace |
| Southbound Connect Buys | Xiaomi (Large), Alibaba, Hang Seng Tech ETF, Meituan, Tencent, YOFC (Moderate), SMIC (Small) | N/A |
| Southbound Connect Sells | CNOOC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | 1.1 |
| Communication Services | 9 | 0.52 |
| Consumer Discretionary | 28 | 0.07 |
| Consumer Staples | 13 | 1.28 |
| Energy | 7 | -0.84 |
| Financials | 23 | 0.73 |
| Health Care | 13 | 1.04 |
| Industrials | 20 | 1.91 |
| Information Technology | 10 | 0.43 |
| Materials | 10 | 0.45 |
| Real Estate | 6 | 1.24 |
| Utilities | 12 | 1.23 |
| Mainland China Listed | 404 | 1.78 |
| Communication Services | 6 | 0.22 |
| Consumer Discretionary | 31 | 2.63 |
| Consumer Staples | 24 | 0.28 |
| Energy | 13 | 0.15 |
| Financials | 64 | 0.59 |
| Health Care | 31 | 0.49 |
| Industrials | 64 | 1.23 |
| Information Technology | 91 | 2.81 |
| Materials | 58 | 1.54 |
| Real Estate | 6 | 1.07 |
| Utilities | 16 | 3.65 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.4 |
| Alibaba HK | 9988 HK Equity | 1.2 |
| JD.com HK | 9618 HK Equity | 1.3 |
| NetEase HK | 9999 HK Equity | -0.4 |
| Yum China HK | 9987 HK Equity | 0.3 |
| Baozun HK | 9991 HK Equity | -1 |
| Baidu HK | 9888 HK Equity | 1.7 |
| Autohome HK | 2518 HK Equity | 0 |
| Bilibili HK | 9626 HK Equity | 1.1 |
| Trip.com HK | 9961 HK Equity | 2.1 |
| EDU HK | 9901 HK Equity | 0.7 |
| Xpeng HK | 9868 HK Equity | -0.1 |
| Weibo HK | 9898 HK Equity | 1.3 |
| Li Auto HK | 2015 HK Equity | -0.2 |
| Nio Auto HK | 9866 HK Equity | 0.4 |
| Zhihu HK | 2390 HK Equity | 4.6 |
| KE HK | 2423 HK Equity | -1.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0.8 |
| Meituan HK | 3690 HK Equity | 1.8 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 1.4 |
| ALIBABA GROUP HOLDING LTD | 1.2 |
| XIAOMI CORP-CLASS B | 0.8 |
| MEITUAN-CLASS B | 1.8 |
| YANGTZE OPTICAL FIBRE AND-H | 21.2 |
| PING AN INSURANCE GROUP CO-H | 1.8 |
| CHINA LIFE INSURANCE CO-H | 4.3 |
| SEMICONDUCTOR MANUFACTURI-H | 2 |
| AIA GROUP LTD | 1.4 |
| BYD CO LTD-H | 0.7 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | 2.3 |
| SHANTUI CONSTRUCTION MACHI-A | 4.9 |
| EOPTOLINK TECHNOLOGY INC L-A | 9.6 |
| ZHONGJI INNOLIGHT CO LTD-A | 6.9 |
| VICTORY GIANT TECHNOLOGY -A | 5.9 |
| CHINA AEROSPACE TIMES ELEC-A | -2.3 |
| METAX INTEGRATED CIRCUITS -A | 692.9 |
| SUZHOU TFC OPTICAL COMMUNI-A | 9.3 |
| FOXCONN INDUSTRIAL INTERNE-A | 4.3 |
| YONGHUI SUPERSTORES CO LTD-A | -3.2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.04 versus 7.04 yesterday
- CNY per EUR 8.26 versus 8.28 yesterday
- Yield on 10-Year Government Bond 1.83% versus 1.85% yesterday
- Yield on 10-Year China Development Bank Bond 1.91% versus 1.94% yesterday
- Copper Price -0.06%
- Steel Price 0.03%
