PMIs Beat Expectations
5 Min. Read Time
Key News
Asian equities ended 2025 on a soft note, except for Vietnam.
However, volumes were anemic due to half-day sessions in Australia, Hong Kong, and the Philippines, while Japan, South Korea, and Thailand were closed for the day. Mainland China is closed on Friday.
China's Renminbi (CNY) hit another 52-week high versus the US dollar, closing at 6.9882. The Hang Seng Index closed the year up +27.52%, although it was still nearly 17% below its 2021 high. The Hang Seng Tech gained +28.27% for the year, though it remains 49% below its 2021 high. Shanghai and Shenzhen closed the year up +23.67% and +4.44% in US dollars, as the former is above its all-time high and the latter right at it.
Yesterday’s VAT news, especially the waiver of VAT on real estate after two years, is expected to impact RMB 6 trillion in a pro-consumption move. The better-than-expected December PMIs garnered little attention as most folks are on vacation. It's interesting to note the high business expectations in both surveys.
- Manufacturing PMI was 50.1 versus expectations of 49.2 and November’s 49.2
- Non-Manufacturing PMI was 50.2 versus expectations of 49.6 and November’s 49.5
- RatingDog Manufacturing PMI was 50.1 versus expectations of 49.8 and November’s 49.9
Hong Kong had a weak half-day session led lower by growth stocks, except for non-ferrous metal stocks, as precious metals and mining rebounded. Mainland China wasn’t as poor as Hong Kong, as banks, oil, telecom, and non-ferrous metal stocks outperformed, while growth names underperformed. Southbound Stock Connect was a net buy today, breaking a three-day net sell streak with +$433mm of net buying from Mainland investors. For 2025, Mainland investors purchased $180 billion of Hong Kong stocks and ETFs, although December saw a notable decline with only $2.9 billion of net buying.
The Ministry of Commerce articulated the 15% subsidy for home appliances and consumer electronics, but Mainland-listed tech hardware stocks, such as Foxconn (-3.11%), declined. This follows yesterday’s report that auto/EV subsidies will be extended, although Hong Kong auto/EV stocks were off except for CATL, which gained +0.5%.
President Xi’s New Year's Eve speech highlighted the accomplishments achieved during the 14th Five-Year Plan, emphasizing the importance of technology. President Xi will publish an article on January 1st in Qiushi Journal titled "Learning to implement the spirit of the fourth Plenary Session of the 20th CPC Central Committee”. The NDRC stated that 673 urban renewal projects have been approved, costing RMB 75B.
Have a fantastic New Year’s Eve!
Below is a screenshot of shipping activity in the Strait of Taiwan from here, taken yesterday. Seems normal to me!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.9% |
| Hang Seng Tech | HSTECH Index | -1.1% |
| Hong Kong Turnover | HKTurn Index | -40.4% |
| Hong Kong Short Sale Turnover | HKSST Index | -41.9% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 14.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 440.47 |
| China (Shanghai) | SHCOMP Index | 0.1% |
| China (Shenzhen) | SZCOMP Index | -0.3% |
| China (STAR Board) | Star50 Index | -1.2% |
| Mainland Turnover | .chturn Index | -4.5% |
| 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 | -0.4% |
| India | SENSEX Index | 0.6% |
| Indonesia | JCI Index | 0% |
| Malaysia | FBMKLCI Index | -0.3% |
| Pakistan | KSE100 Index | -0.2% |
| Philippines | PCOMP Index | -0.2% |
| South Korea | KOSPI Index | -0.2% |
| Taiwan | TWSE Index | 0.9% |
| Thailand | SET Index | 0.4% |
| Singapore | STI Index | -0.2% |
| Australia | AS51 Index | 0% |
| Vietnam | VNINDEX Index | 1% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 47% | 120% |
| Advancing Stocks | 186 | 2354 |
| Declining Stocks | 296 | 2579 |
| Outperforming Factors | EPS Revisions, Buyback | |
| Underperforming Factors | Quality, Growth, Buyback | Growth, Liquidity, Large Caps |
| Top Sectors | Materials, Utilities | Real Estate, Materials, Communication |
| Bottom Sectors | Healthcare, Discretionary, Staples | Tech, Staples, Healthcare |
| Top Subsectors | National Defense, Machinery, Non Ferrous Metals | Cultural Media, Aerospace, Education |
| Bottom Subsectors | Industry Conglomerates, Consumer Durables/Apparel, Household/Personal Products | Forest, Semis, Energy Equipment |
| Southbound Connect Buys | Alibaba, Sanhua, SMIC (Small) | |
| Southbound Connect Sells | Tencent, Zijin Mining (Moderate) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -0.74 |
| Communication Services | 11 | -0.37 |
| Consumer Discretionary | 28 | -1.32 |
| Consumer Staples | 13 | -1.06 |
| Energy | 6 | -0.69 |
| Financials | 25 | -0.57 |
| Health Care | 15 | -1.59 |
| Industrials | 21 | -0.78 |
| Information Technology | 12 | -0.26 |
| Materials | 10 | 0.31 |
| Real Estate | 7 | -0.87 |
| Utilities | 12 | 0.04 |
| Mainland China Listed | 386 | -0.44 |
| Communication Services | 8 | 0.68 |
| Consumer Discretionary | 28 | -0.42 |
| Consumer Staples | 21 | -0.89 |
| Energy | 12 | -0.08 |
| Financials | 66 | -0.1 |
| Health Care | 33 | -0.76 |
| Industrials | 57 | -0.28 |
| Information Technology | 91 | -1.48 |
| Materials | 49 | 0.87 |
| Real Estate | 6 | 2.23 |
| Utilities | 14 | -0.39 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.2 |
| Alibaba HK | 9988 HK Equity | -1.2 |
| JD.com HK | 9618 HK Equity | -1.8 |
| NetEase HK | 9999 HK Equity | -3.2 |
| Yum China HK | 9987 HK Equity | -0.3 |
| Baozun HK | 9991 HK Equity | 0 |
| Baidu HK | 9888 HK Equity | 1.4 |
| Autohome HK | 2518 HK Equity | 0.6 |
| Bilibili HK | 9626 HK Equity | 0.4 |
| Trip.com HK | 9961 HK Equity | -3 |
| EDU HK | 9901 HK Equity | -2.5 |
| Xpeng HK | 9868 HK Equity | -0.9 |
| Weibo HK | 9898 HK Equity | -0.3 |
| Li Auto HK | 2015 HK Equity | -1.4 |
| Nio Auto HK | 9866 HK Equity | -0.6 |
| Zhihu HK | 2390 HK Equity | 0.4 |
| KE HK | 2423 HK Equity | -1 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.5 |
| Meituan HK | 3690 HK Equity | -1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -0.2 |
| ALIBABA GROUP HOLDING LTD | -1.2 |
| SEMICONDUCTOR MANUFACTURI-H | -1.4 |
| ZIJIN MINING GROUP CO LTD-H | 0.8 |
| MEITUAN-CLASS B | -1 |
| XIAOMI CORP-CLASS B | -0.2 |
| POP MART INTERNATIONAL GROUP | -1.6 |
| ZHEJIANG SANHUA INTELLIGEN-H | -0.3 |
| CHINA CONSTRUCTION BANK-H | -0.4 |
| BYD CO LTD-H | -2.3 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHEJIANG SANHUA INTELLIGEN-A | 5.4 |
| ADDSINO CO LTD -A | 10 |
| ZHONGJI INNOLIGHT CO LTD-A | -3.5 |
| CHINA SPACESAT CO LTD -A | 10 |
| CHINA AEROSPACE TIMES ELEC-A | 10 |
| EOPTOLINK TECHNOLOGY INC L-A | -3.4 |
| SHENZHEN SUNWAY COMMUNICAT-A | 17 |
| ZIJIN MINING GROUP CO LTD-A | 3.1 |
| BLUEFOCUS INTELLIGENT COMM-A | 20 |
| FOXCONN INDUSTRIAL INTERNE-A | -3.4 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.98 versus 6.99 yesterday
- CNY per EUR 8.21 versus 8.22 yesterday
- Yield on 10-Year Government Bond 1.85% versus 1.86% yesterday
- Yield on 10-Year China Development Bank Bond 1.96% versus 1.96% yesterday
- Copper Price +1.31%
- Steel Price -0.32%
