Regulation Trips Trip.com, PBOC Gets Behind Domestic Consumption
6 Min. Read Time
Key News
Asian equities were mixed overnight as South Korea and the Philippines outperformed, while Vietnam underperformed, and India was closed for Election Day.
Mainland China survived the implementation of higher margin rates, which increased from 80% to 100% on new positions, but remained the same for existing loans. The ETFs favored by the National Team had very strong volumes, indicating support from long-term institutional investors affiliated with sovereign wealth.
Trump announced limited tariffs on chip imports, and markets mostly shrugged at the announcement. Chipmakers were slightly lower, as Cambricon declined -1.68%. Mainland-listed technology hardware, communication equipment, and semiconductor materials and equipment all rallied.
Today’s big news was a State Council Information press conference with the People's Bank of China (PBOC) and State Administration of Foreign Exchange (SAFE) on policies supporting the 15th Five Plan. The press conference took place in the afternoon, which may explain the limited impact. However, anticipation of the press conference appears to have boosted real estate stocks across both the Mainland and Hong Kong markets, making it the top-performing sector in both markets.
Below are some key points from the conference:
- The 1-year lending rate will be reduced by 0.25% to 1.5% while “other term tiers were adjusted simultaneously.” The PBOC also stated that there is “room for reduction in reserve requirement ratio and interest rates.”
- Small business and agricultural loans will be increased by RMB 500 billion to RMB 1 trillion.
- Loans supporting “scientific and technological innovation and private enterprise bonds” will be increased from RMB 800 billion to RMB 1.2 trillion.
- Other measures include “cardon reduction support tools”, “service consumption loans, elderly care loans”, reducing the minimum down payment ratio for commercial building purchase loans to 30%, supporting the promotion of inventory reduction in commercial office real estate markets, and enhancing foreign exchange hedging tools.
- The PBOC also stated it would maintain “moderate loose monetary policy" throughout 2026, which is necessary for "boosting consumption and expanding domestic demand.”
Trip.com’s Hong Kong share class fell -19.23% following yesterday’s monopoly investigation announcement by the State Administration for Market Regulation (SAMR). Yes, the company has a dominant market share, which may have led to abuse. However, decapitating such a well-respected company just as foreign investors return to China's markets would be short-sighted. The news also hit Tongcheng Travel Holdings, which fell-8.24%, though it is much smaller than Trip and does not exhibit monopoly-like characteristics. But, Trip.com owns about 20% of the company’s shares, which is likely what drove the selling.
It is worth noting that stocks that are popular among foreign investors, including Alibaba, which fell -2.6%, and Tencent, which fell -1.74%, were mostly lower. This was despite the fact that both Alibaba and Tencent stocks saw net buying from Mainland investors via Southbound Stock Connect.
Alibaba announced the further integration of its Qwen large language model (LLM) across multiple business units, including domestic E-Commerce platform Taobao, online payment platform Alipay, online travel platform Fliggy, and mapping and navigation tool Amap.
Autos were mixed on EU-China trade talks. Although shares in the massive automaker BYD gained 1.54% and those of the battery giant CATL gained 0.7%, some pure electric vehicle (EV) stocks were lower. Southbound Stock Connect was a rare net sell today. Non-ferrous metals had another positive session.
It is worth noting that December aggregate financing and new loans beat expectations. Despite all the negative headlines, aggregate financing increased 8.3% on an annual basis from 2024 to 2025.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.3% |
| Hang Seng Tech | HSTECH Index | -1.4% |
| Hong Kong Turnover | HKTurn Index | -14.7% |
| Hong Kong Short Sale Turnover | HKSST Index | -18.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 12.1% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -193.53 |
| China (Shanghai) | SHCOMP Index | -0.3% |
| China (Shenzhen) | SZCOMP Index | -0.1% |
| China (STAR Board) | Star50 Index | -0.5% |
| Mainland Turnover | .chturn Index | -26.4% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | -1.3% |
| Japan | NKY Index | -0.4% |
| India | SENSEX Index | -0.3% |
| Indonesia | JCI Index | 0.5% |
| Malaysia | FBMKLCI Index | 0.2% |
| Pakistan | KSE100 Index | -0.8% |
| Philippines | PCOMP Index | 1.5% |
| South Korea | KOSPI Index | 1.6% |
| Taiwan | TWSE Index | -0.4% |
| Thailand | SET Index | 1.4% |
| Singapore | STI Index | 0.4% |
| Australia | AS51 Index | 0.5% |
| Vietnam | VNINDEX Index | -1.6% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 114 | 163 |
| Advancing Stocks | 251 | 2137 |
| Declining Stocks | 229 | 2898 |
| Outperforming Factors | Dividend Yield, Value, Low Volatility | Momentum, Liquidity, Growth |
| Underperforming Factors | EPS Revision, Quality, Momentum | Dividend Yield, Low Volatility, Quality |
| Top Sectors | Real Estate, Tech, Industrials | Real Estate, Materials, Tech |
| Bottom Sectors | Discretionary, Communication, Staples | Communication, Healthcare, Financials |
| Top Subsectors | ||
| Bottom Subsectors | ||
| Southbound Connect Buys | Alibaba (Large), Tencent (Moderate), SMIC (Small), China Life (Tiny) | |
| Southbound Connect Sells | CNOOC, XtalPi (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -1.23 |
| Communication Services | 11 | -1.73 |
| Consumer Discretionary | 28 | -2.68 |
| Consumer Staples | 13 | -0.73 |
| Energy | 6 | -0.2 |
| Financials | 25 | 0.17 |
| Health Care | 15 | -0.59 |
| Industrials | 21 | 0.45 |
| Information Technology | 12 | 0.51 |
| Materials | 10 | -0.34 |
| Real Estate | 7 | 1.49 |
| Utilities | 12 | -0.1 |
| Mainland China Listed | 386 | 0.16 |
| Communication Services | 8 | -1.26 |
| Consumer Discretionary | 28 | -0.2 |
| Consumer Staples | 21 | -0.43 |
| Energy | 12 | -0.07 |
| Financials | 66 | -0.89 |
| Health Care | 33 | -1.11 |
| Industrials | 57 | 0.46 |
| Information Technology | 91 | 1.16 |
| Materials | 49 | 1.17 |
| Real Estate | 6 | 1.25 |
| Utilities | 14 | -0.21 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.7 |
| Alibaba HK | 9988 HK Equity | -2.6 |
| JD.com HK | 9618 HK Equity | -0.7 |
| NetEase HK | 9999 HK Equity | -3.2 |
| Yum China HK | 9987 HK Equity | -1.3 |
| Baozun HK | 9991 HK Equity | 0.1 |
| Baidu HK | 9888 HK Equity | 0.8 |
| Autohome HK | 2518 HK Equity | 5.2 |
| Bilibili HK | 9626 HK Equity | -1 |
| Trip.com HK | 9961 HK Equity | -19.2 |
| EDU HK | 9901 HK Equity | -1.6 |
| Xpeng HK | 9868 HK Equity | -1.5 |
| Weibo HK | 9898 HK Equity | -0.2 |
| Li Auto HK | 2015 HK Equity | 0.5 |
| Nio Auto HK | 9866 HK Equity | -1.3 |
| Zhihu HK | 2390 HK Equity | -3.3 |
| KE HK | 2423 HK Equity | 2.5 |
| Tencent Music Entertainment HK | 1698 HK Equity | -2.5 |
| Meituan HK | 3690 HK Equity | -0.7 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -2.6 |
| TRIP.COM GROUP LTD | -19.2 |
| TENCENT HOLDINGS LTD | -1.7 |
| SEMICONDUCTOR MANUFACTURI-H | 2 |
| XIAOMI CORP-CLASS B | -0.5 |
| PING AN INSURANCE GROUP CO-H | -1.9 |
| ALIBABA HEALTH INFORMATION T | 19 |
| MEITUAN-CLASS B | -0.7 |
| XTALPI HOLDINGS LTD | -10.7 |
| HUA HONG SEMICONDUCTOR LTD-H | 6.3 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 1.2 |
| LEO GROUP CO LTD-A | 4.7 |
| BLUEFOCUS INTELLIGENT COMM-A | 3.7 |
| EOPTOLINK TECHNOLOGY INC L-A | 4.2 |
| TBEA CO LTD-A | -2 |
| ZIJIN MINING GROUP CO LTD-A | -0.6 |
| LUXSHARE PRECISION INDUSTR-A | 7.1 |
| SHENZHEN SUNWAY COMMUNICAT-A | 1.9 |
| EAST MONEY INFORMATION CO-A | 0.9 |
| CONTEMPORARY AMPEREX TECHN-A | -0.1 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.96 versus 6.97 yesterday
- CNY per EUR 8.10 versus 8.12 yesterday
- Yield on 10-Year Government Bond 1.85% versus 1.85% yesterday
- Yield on 10-Year China Development Bank Bond 1.97% versus 1.97% yesterday
- Copper Price -1.03%
- Steel Price -0.09%
