Renminbi Rises, SOEs Get Royal Treatment
5 Min. Read Time
Key News
Asian equities were largely higher, as Australia outperformed with copper miner BHP Group hitting a 52-week high along with a rally in copper futures. China's currency, the renminbi (CNY) also hit a 52-week high versus the US dollar, closing at 7.02 per US dollar.
In a speech, President Xi told state-owned enterprises (SOEs) that they should “… focus on the real economy, strengthen key core technology research and development capabilities, and promote the deep integration of scientific and technological innovation and industrial innovation.” The speech accompanied Premier Li's remarks at the Central Enterprise Leaders’ Conference's two-day meeting on how SOEs should incorporate the key elements of the 15th Five-Year Plan, emphasizing they should be “promoting high-level self-reliance in science and technology”. The SOE emphasis was clear as Mainland and Hong Kong-listed financials and energy stocks outperformed overnight.
Hong Kong volumes were very light as the market eased off morning gains. Kuaishou’s cyber attack hit the stock, sending it lower by -3.52%. Meanwhile, Tencent fell 2.03%, as Mainland investors were net sellers via Southbound Stock Connect, although the company announced after the close that it plans to buy back 1.05 million shares. Southbound Stock Connect accounted for 26% of volume in Hong Kong, desite only seeing a net inflow of $78 million. Alibaba was a large net buy by Mainland investors within the program, sending the stock higher by +0.55%.
Hong Kong IPOs keep on coming. AI chip maker Biren Technology’s IPO is 47 times oversubscribed, while AI company Mini Max’s IPO appears to be moving fast.
Battery giant Contemporary Amperex (CATL), semiconductor stocks, technology hardware, and gold stocks all had good sessions in both markets. Meanwhile, the ETFs favored by the National Team had above-average volumes, indicating that they may have received support from state-affiliated institutional investors.
The Wall Street Journal had a good article on the Federal Communications Commission (FCC) decision to ban Chinese drone maker DJI. Isn’t this the type of US government bureaucracy that Stephen Miller has been tasked with preventing? China definitely noticed the ban.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.1% |
| Hang Seng Tech | HSTECH Index | -0.7% |
| Hong Kong Turnover | HKTurn Index | -7.4% |
| Hong Kong Short Sale Turnover | HKSST Index | -6.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15.5% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 78.06 |
| China (Shanghai) | SHCOMP Index | 0.1% |
| China (Shenzhen) | SZCOMP Index | 0% |
| China (STAR Board) | Star50 Index | 0.4% |
| Mainland Turnover | .chturn Index | 1.9% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -0.1% |
| Japan | NKY Index | 0% |
| India | SENSEX Index | 0% |
| Indonesia | JCI Index | -0.7% |
| Malaysia | FBMKLCI Index | 0.3% |
| Pakistan | KSE100 Index | 0% |
| Philippines | PCOMP Index | 0% |
| South Korea | KOSPI Index | 0.3% |
| Taiwan | TWSE Index | 0.6% |
| Thailand | SET Index | 0.1% |
| Singapore | STI Index | 0.6% |
| Australia | AS51 Index | 1.1% |
| Vietnam | VNINDEX Index | 1.2% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume as % of 1-Year Average | 63 | 112 |
| Advancing Stocks | 210 | 1466 |
| Declining Stocks | 262 | 3583 |
| Outperforming Factors | Buyback, Value, Low Volatility | Momentum, EPS Revision, Large Cap |
| Underperforming Factors | EPS Revision, Growth, Momentum | Quality, Low Volatility, Buybacks |
| Top Sectors | Real Estate, Financials, Industrials | Tech, Communication, Industrials |
| Bottom Sectors | Communication, Tech, Healthcare | Consumer Discretionary, Staples, Healthcare |
| Top Subsectors | Construction Materials, Chemical Industry, Commercial/Professional Services | Fine Chemical, Insurance, Forest |
| Bottom Subsectors | Software & Services, Media/Entertainment, Consumer Staples Distribution | Catering/Tourism, Aerospace/Military, Education |
| Southbound Connect Buys | Alibaba (Large), CSPC Pharma (Small) | N/A |
| Southbound Connect Sells | China Mobile, Tencent (Large), Kuiashou, SMIC, Xiaomi, YOFC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 151 | -0.45 |
| Communication Services | 9 | -1.82 |
| Consumer Discretionary | 28 | 0.13 |
| Consumer Staples | 13 | -0.4 |
| Energy | 7 | 0.14 |
| Financials | 23 | 0.6 |
| Health Care | 13 | -0.43 |
| Industrials | 20 | 0.16 |
| Information Technology | 10 | -1.11 |
| Materials | 10 | -0.27 |
| Real Estate | 6 | 0.62 |
| Utilities | 12 | 0.02 |
| Mainland China Listed | 404 | 0.42 |
| Communication Services | 6 | 0.67 |
| Consumer Discretionary | 31 | -0.6 |
| Consumer Staples | 24 | -0.26 |
| Energy | 13 | 0.55 |
| Financials | 64 | 0.45 |
| Health Care | 31 | -0.09 |
| Industrials | 64 | 0.62 |
| Information Technology | 91 | 0.83 |
| Materials | 58 | 0.51 |
| Real Estate | 6 | 0.42 |
| Utilities | 16 | 0.32 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -2 |
| Alibaba HK | 9988 HK Equity | 0.5 |
| JD.com HK | 9618 HK Equity | 0.4 |
| NetEase HK | 9999 HK Equity | -0.7 |
| Yum China HK | 9987 HK Equity | 0.1 |
| Baozun HK | 9991 HK Equity | -1.3 |
| Baidu HK | 9888 HK Equity | -0.4 |
| Autohome HK | 2518 HK Equity | 1.4 |
| Bilibili HK | 9626 HK Equity | -0.1 |
| Trip.com HK | 9961 HK Equity | -1.2 |
| EDU HK | 9901 HK Equity | 0.6 |
| Xpeng HK | 9868 HK Equity | -0.9 |
| Weibo HK | 9898 HK Equity | -0.6 |
| Li Auto HK | 2015 HK Equity | -1.4 |
| Nio Auto HK | 9866 HK Equity | -1 |
| Zhihu HK | 2390 HK Equity | -0.5 |
| KE HK | 2423 HK Equity | 0.9 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.4 |
| Meituan HK | 3690 HK Equity | 0.4 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -2 |
| ALIBABA GROUP HOLDING LTD | 0.5 |
| XIAOMI CORP-CLASS B | -1.5 |
| KUAISHOU TECHNOLOGY | -3.5 |
| CHINA MOBILE LTD-H | -1 |
| SEMICONDUCTOR MANUFACTURI-H | 0 |
| CSPC PHARMACEUTICAL GROUP LT | 7.6 |
| PING AN INSURANCE GROUP CO-H | 1.1 |
| YANGTZE OPTICAL FIBRE AND-H | -5.1 |
| MEITUAN-CLASS B | 0.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 0.6 |
| EOPTOLINK TECHNOLOGY INC L-A | -1.1 |
| FOXCONN INDUSTRIAL INTERNE-A | 3.7 |
| CHINA SPACESAT CO LTD -A | -5.3 |
| VICTORY GIANT TECHNOLOGY -A | 3.4 |
| CHINA TOURISM GROUP DUTY F-A | -2.4 |
| CAMBRICON TECHNOLOGIES-A | 4 |
| CHINA AEROSPACE TIMES ELEC-A | -7.8 |
| ADDSINO CO LTD -A | -0.2 |
| CONTEMPORARY AMPEREX TECHN-A | 1.7 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.03 versus 7.04 yesterday
- CNY per EUR 8.28 versus 8.27 yesterday
- Yield on 10-Year Government Bond 1.84% versus 1.84% yesterday
- Yield on 10-Year China Development Bank Bond 1.90% versus 1.91% yesterday
- Copper Price -0.01%
- Steel Price 0.38%
