Growth Stocks Rebound On FTSE Rebalance, Week In Review
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Week in Review
- Asian equities were mostly lower this week though Vietnam and Malaysia managed gains, while South Korea and Mainland China's STAR Market underperformed.
- The Hong Kong IPO of graphics processing unit (GPU) chipmaker Meta X Integrated gained +692% after raising $585 million on Wednesday.
- China's currency the renminbi (CNY) continued to notch new 1-year highs versus the US dollar this week, as the central bank indicated efforts to stabilize the currency's appreciation.
- November economic data, released at the start of the week, did not help sentiment as the release was broadly lighter than expectations. The end of the year and holiday season likely didn’t help either, as some investors locked in profits.
Friday's Key News
Asian equities ended the week on a high note as Vietnam outperformed and the Philippines underperformed.
China's currency, the renminbi (CNY), hit another 52-week high versus the US dollar. Today is arguably the last meaningful trading of the year (yes, I’m knocking on wood!), driven by the S&P and FTSE Russell index rebalances, index and stock options, and futures expiration. We call big index rebalance trading days “moving day” as pro golfers look to go low on Saturday in order to get in the hunt for winning on Sunday. Institutional investors can mask their movements on these big liquidity days.
Tencent gained +1.49% and Alibaba gained +0.83%, and were the most heavily traded stocks in Hong Kong by volume, doubling the volume of the #3 most heavily traded stock, Meituan, which gained +1.28%. These are the two most heavily owned China names, so a positive sign IMO. Baidu gained +1.02% as AI chip unit Kunlun changed its name and capital structure, which we believe will likely result in a spin-off via a Hong Kong IPO.
U.S.-listed Pinduoduo is higher pre-market after announcing Zha Jiazhen will become Co-Chairman along with Chen Lei. The move is being viewed as an improvement in corporate governance, as the company has historically been incredibly untransparent and non-communicative.
Hong Kong stocks had a very strong day, led by growth stocks, as Mainland investors bought $433 million of Hong Kong stocks via the Southbound Stock Connect. Connect accounted for only 17% of Hong Kong turnover due to the FTSE rebalance, compared to the average of around 23%.
Healthcare stocks jumped overnight after I noted the removal of sanctions in the US Defense budget earlier this week. Wuxi Biologics gained +4.4% and WuXi AppTec gained +1.47%.
Mainland China, which is not a significant factor in the FTSE rebalance, had a very strong breadth of advancers versus decliners, except for bank, oil, and semiconductor stocks. Fairly quiet day, except for the index rebalance.
Premier Li and the State Council met to “study and implement” President Xi and the Central Economic Work Conference’s release based on the 15th Five-Year Plan draft. The Ministry of Commerce has pointed out that online retail sales year-to-date are up +9.1%, led by smart wearables at +22.1% and smart robots at +19.4%. As noted by the State Post Bureau, express delivery volume reached 180 billion as of November 30.
A Reuters article, titled “Exclusive: How China built its ‘Manhattan Project’ to rival the West in AI chips,” has garnered a lot of attention. Have Chinese scientists at the Shanghai Institute of Optics and Fine Mechanics replicated an ASML lithography machine? Maybe! Maybe not! Worthwhile read though.
While in Singapore waiting for a meeting to take place, I took in a great view of the Strait of Malacca. In viewing the incredible supertanker and cargo traffic going to and from Europe, the Middle East, and China, I had the realization that the Strait of Malacca was the best China economist in Singapore. All day and every day, you look out the window and see dozens, if not hundreds, of ships. I stumbled upon the Italian website Informare, which reported that 2024 was a record-breaking year for shipments through the Strait: https://www.informare.it/news/gennews/2025/20250028-Stretti-Malacca-Singapore-transiti-Y-2024.asp.
“New annual record for vessel transit through the Straits of Malacca and Singapore. In 2024, traffic was 94,301 ships (+5.5%). This further growth was primarily driven by a sharp increase in transits of bulk carriers, which reached a record 19,507 vessels (+7.4%), and very large crude carriers, which reached a record 9,724 VLCCs (+1.9%). A new record was also set for transits of liquefied natural gas vessels, with 5,003 vessels (+3.0%)."
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.8% |
| Hang Seng Tech | HSTECH Index | 1.1% |
| Hong Kong Turnover | HKTurn Index | 36.2% |
| Hong Kong Short Sale Turnover | HKSST Index | 53% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 20.4% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 430.49 |
| China (Shanghai) | SHCOMP Index | 0.4% |
| China (Shenzhen) | SZCOMP Index | 1% |
| China (STAR Board) | Star50 Index | 0.2% |
| Mainland Turnover | .chturn Index | 4.2% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -0.3% |
| Japan | NKY Index | 1% |
| India | SENSEX Index | 0.5% |
| Indonesia | JCI Index | -0.1% |
| Malaysia | FBMKLCI Index | 1.2% |
| Pakistan | KSE100 Index | -0.5% |
| Philippines | PCOMP Index | -1.8% |
| South Korea | KOSPI Index | 0.7% |
| Taiwan | TWSE Index | 0.8% |
| Thailand | SET Index | 0.2% |
| Singapore | STI Index | 0% |
| Australia | AS51 Index | 0.4% |
| Vietnam | VNINDEX Index | 1.6% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 89% | 102% |
| Advancing Stocks | 350 | 4315 |
| Declining Stocks | 136 | 849 |
| Outperforming Factors | Growth, Quality, Momentum | Liquidity, Momentum, EPS Revision |
| Underperforming Factors | Dividend Yield, Value, Low Volatility | |
| Top Sectors | Healthcare, Staples, Communication | Real Estate, Materials, Discretionary |
| Bottom Sectors | Energy, Utilities | Energy, Utilities, Financials |
| Top Subsectors | Household/Personal Products, Electrical Equipment, Food | Leisure Products, Retail, Soft Drink |
| Bottom Subsectors | Textiles, Petroleum/Petrochemical | Forest, Oil/Gas, Coal |
| Southbound Connect Buys | Alibaba, Tencent (Large), Xiaomi, YOFC (Small) | |
| Southbound Connect Sells | China Mobile (Large), Horizon Robot, Meituan, SMIC, XPeng (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | 0.87 |
| Communication Services | 11 | -0.19 |
| Consumer Discretionary | 28 | 0.2 |
| Consumer Staples | 13 | 1.38 |
| Energy | 6 | -0.16 |
| Financials | 25 | 0.81 |
| Health Care | 15 | 1.8 |
| Industrials | 21 | 0.71 |
| Information Technology | 12 | 1.82 |
| Materials | 10 | 0.71 |
| Real Estate | 7 | 0.36 |
| Utilities | 12 | 0.73 |
| Mainland China Listed | 386 | 0.41 |
| Communication Services | 8 | 1.48 |
| Consumer Discretionary | 28 | 1.03 |
| Consumer Staples | 21 | -1.08 |
| Energy | 12 | -0.36 |
| Financials | 66 | 0.51 |
| Health Care | 33 | 1.29 |
| Industrials | 57 | 1.26 |
| Information Technology | 91 | 1.43 |
| Materials | 49 | 0.7 |
| Real Estate | 6 | -0.14 |
| Utilities | 14 | 0.07 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.5 |
| Alibaba HK | 9988 HK Equity | 0.8 |
| JD.com HK | 9618 HK Equity | -0.8 |
| NetEase HK | 9999 HK Equity | 1.3 |
| Yum China HK | 9987 HK Equity | 0.6 |
| Baozun HK | 9991 HK Equity | 0 |
| Baidu HK | 9888 HK Equity | 1 |
| Autohome HK | 2518 HK Equity | 4 |
| Bilibili HK | 9626 HK Equity | 0.5 |
| Trip.com HK | 9961 HK Equity | 0.3 |
| EDU HK | 9901 HK Equity | -0.3 |
| Xpeng HK | 9868 HK Equity | 7.7 |
| Weibo HK | 9898 HK Equity | 1.5 |
| Li Auto HK | 2015 HK Equity | 3.8 |
| Nio Auto HK | 9866 HK Equity | 2.3 |
| Zhihu HK | 2390 HK Equity | 2.2 |
| KE HK | 2423 HK Equity | -0.2 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1.5 |
| Meituan HK | 3690 HK Equity | 1.3 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 1.5 |
| ALIBABA GROUP HOLDING LTD | 0.8 |
| MEITUAN-CLASS B | 1.3 |
| CHINA CONSTRUCTION BANK-H | -0.4 |
| XIAOMI CORP-CLASS B | 0.8 |
| YANGTZE OPTICAL FIBRE AND-H | 12 |
| CONTEMPORARY AMPEREX TECHN-H | 2.2 |
| HORIZON ROBOTICS INC | 7 |
| SEMICONDUCTOR MANUFACTURI-H | 0.5 |
| CHINA MOBILE LTD-H | -0.2 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EOPTOLINK TECHNOLOGY INC L-A | 2.1 |
| ZHONGJI INNOLIGHT CO LTD-A | 0.1 |
| ADDSINO CO LTD -A | 4 |
| YONGHUI SUPERSTORES CO LTD-A | 4.9 |
| CHINA AEROSPACE TIMES ELEC-A | 4.6 |
| CHINA SPACESAT CO LTD -A | 4.3 |
| SUZHOU TFC OPTICAL COMMUNI-A | -2.2 |
| SUNGROW POWER SUPPLY CO LT-A | 1.7 |
| GIGADEVICE SEMICONDUCTO-CL A | -2 |
| CONTEMPORARY AMPEREX TECHN-A | 0.5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.04 versus 7.04 yesterday
- CNY per EUR 8.24 versus 8.25 yesterday
- Yield on 10-Year Government Bond 1.83% versus 1.84% yesterday
- Yield on 10-Year China Development Bank Bond 1.90% versus 1.91% yesterday
- Copper Price -0.03%
- Steel Price -0.16%
