China’s Biggest Week Kicks Off
5 Min. Read Time
Key News
Asian equities were mixed as Middle East tensions flared, while the AI "picks & shovels" trade lifted hardware technology and chip stocks in South Korea, Taiwan, Mainland China, and Hong Kong. The renminbi (CNY) was stronger overnight against the US dollar, as the exchange rate closed below 6.80 CNY per USD.
The Ministry of Foreign Affairs officially confirmed President Trump’s three-day visit beginning Wednesday. Although it was not widely publicized in Western media, Vice Premier He Lifeng will meet with his US trade counterparts to discuss “economic and trade issues” in South Korea on May 12th and 13th. China Daily reported that Chinese and US drug enforcement agencies cooperated in the arrest of five suspects on “a transnational drug smuggling case”.
In both Mainland China and Hong Kong, semiconductors and technology hardware outperformed in a largely positive day. The semiconductor-heavy STAR Board gained +4.65%. However, Hong Kong-listed internet stocks were weak in advance of this week’s earnings results, along while non-ferrous metals, which lagged lagged.
Kuaishou fell -2.55% overnight. Though, after the close, The Information reported that the company will spin off its Kling AI video business at $20 billion value.
Alibaba fell -3.67% and was Hong Kong's most heavily traded stock by value. The company launched an AI customer service agent called Xiao Mi for e-commerce clients. It was interesting that this news was a front page item in today’s Mainland media source Global Times. Alibaba’s Hong Kong-listed shares were bought by Mainland investors via Southbound Stock Connect to the tune of $140 million (HKD 1.07 billion).
Tencent fell -1.48% as it was a net sell from Mainland investors.
Strong trade data lifted China's clean technology ecosystem. Demand for alternative energy solutions from China appears to be coming to fruition. I have had a hard time finding specific details on the trade data, but I will report back on what I can find. Beneficiaries of the positive trade release included CATL, which gained +1.00% in Hong Kong and +2.08% in Mainland China, and BYD, which gained +1.95% in Hong Kong and +0.42% in Mainland China.
April Trade & Economic Data
% changes are year-over-year (YoY)
- Exports +14.1% versus May’s 2.5% and expectations of 8.4%
- Imports +25.3% versus May’s 27.8% and expectations of 20.0%
- Trade Balance $84.8 billion versus May’s $51. billion and expectations of $83.6 billion
- Producer Price Index (PPI) +2.8% versus May’s +0.5% and expectations of +1.8%
- Consumer Price Index (CPI) YoY +1.2% versus May’s +1.0% and expectations of +0.9%
Premier Li hosted a State Council meeting on local government debt risks. All in all, it was not a bad start to a big week. JD.com and Tencent Music Entertainment will report Q1 earnings tomorrow after the close in Hong Kong.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0% |
| Hang Seng Tech | HSTECH Index | 0.1% |
| Hong Kong Turnover | HKTurn Index | 3.1% |
| Hong Kong Short Sale Turnover | HKSST Index | 6.1% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.8% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 9.07 |
| China (Shanghai) | SHCOMP Index | 1.1% |
| China (Shenzhen) | SZCOMP Index | 1.6% |
| China (STAR Board) | Star50 Index | 4.6% |
| Mainland Turnover | .chturn Index | 16.1% |
| Japan | NKY Index | -0.5% |
| India | SENSEX Index | -1.7% |
| Indonesia | JCI Index | -0.9% |
| Malaysia | FBMKLCI Index | -0.2% |
| Pakistan | KSE100 Index | -0.4% |
| Philippines | PCOMP Index | 0.4% |
| South Korea | KOSPI Index | 4.3% |
| Taiwan | TWSE Index | 0.4% |
| Thailand | SET Index | -0.7% |
| Singapore | STI Index | 0.4% |
| Australia | AS51 Index | -0.5% |
| Vietnam | VNINDEX Index | -1% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 111 | 200 |
| Advancing Stocks | 256 | 2957 |
| Declining Stocks | 253 | 2080 |
| Outperforming Factors | Value, Dividend Yield, Low Volatility | Liquidity, Momentum, Growth |
| Underperforming Factors | Growth, EPS Revision, Liquidity | Value |
| Top Sectors | Real Estate, Utilities, Technology | Tech, Real Estate, Industrials |
| Bottom Sectors | Consumer Discretionary, Materials, Communication Services | Energy, Communication, Staples |
| Top Subsectors | Semis, Technology Hardware, Machinery | Construction Machinery, Semis, Computer Hardware |
| Bottom Subsectors | Consumer Discretionary Distribution, Non-Ferrous Metals, Media & Entertainment | Marine, Precious Metal, Port |
| Southbound Connect Buys | Alibaba (Large), SMIC (Moderate), CIG, Pop Mart (Small) | N/A |
| Southbound Connect Sells | Tencent (Large), Hong Kong Tracker ETF (Moderate), Hua Hong Semi, Xiaomi, YOFC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -0.66 |
| Communication Services | 11 | -1.54 |
| Consumer Discretionary | 28 | -1.79 |
| Consumer Staples | 12 | 0.3 |
| Energy | 6 | -0.2 |
| Financials | 25 | 0.63 |
| Health Care | 16 | -0.01 |
| Industrials | 19 | 0.66 |
| Information Technology | 15 | 0.83 |
| Materials | 14 | -1.76 |
| Real Estate | 1 | 2.43 |
| Utilities | 6 | 1.4 |
| Mainland China Listed | 11 | 1.7 |
| Communication Services | 11 | -0.41 |
| Consumer Discretionary | 26 | 0.15 |
| Consumer Staples | 18 | -0.22 |
| Energy | 11 | -0.83 |
| Financials | 64 | 0.65 |
| Health Care | 29 | 1.01 |
| Industrials | 60 | 1.76 |
| Information Technology | 113 | 4.39 |
| Materials | 58 | 0.05 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.5 |
| Alibaba HK | 9988 HK Equity | -3.7 |
| JD.com HK | 9618 HK Equity | 0 |
| NetEase HK | 9999 HK Equity | -0.5 |
| Yum China HK | 9987 HK Equity | -0.6 |
| Baozun HK | 9991 HK Equity | -1 |
| Baidu HK | 9888 HK Equity | -3 |
| Autohome HK | 2518 HK Equity | -1.2 |
| Bilibili HK | 9626 HK Equity | -2.9 |
| Trip.com HK | 9961 HK Equity | -4 |
| EDU HK | 9901 HK Equity | -5 |
| Xpeng HK | 9868 HK Equity | 2 |
| Weibo HK | 9898 HK Equity | -0.7 |
| Li Auto HK | 2015 HK Equity | 5.4 |
| Nio Auto HK | 9866 HK Equity | 0.2 |
| Zhihu HK | 2390 HK Equity | -5.3 |
| KE HK | 2423 HK Equity | -0.6 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.8 |
| Meituan HK | 3690 HK Equity | 0.4 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -3.7 |
| TENCENT HOLDINGS LTD | -1.5 |
| SEMICONDUCTOR MANUFACTURI-H | 4.4 |
| KUAISHOU TECHNOLOGY | -2.5 |
| HUA HONG SEMICONDUCTOR LTD-H | 2.4 |
| YANGTZE OPTICAL FIBRE AND-H | 5.4 |
| XIAOMI CORP-CLASS B | 0.1 |
| POP MART INTERNATIONAL GROUP | -0.4 |
| KINGBOARD LAMINATES HLDG LTD | 1.6 |
| VICTORY GIANT TECHNOLOGY H-H | 13.7 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EOPTOLINK TECHNOLOGY INC L-A | 2.2 |
| ZHONGJI INNOLIGHT CO LTD-A | 6.1 |
| CAMBRICON TECHNOLOGIES-A | 1.5 |
| MONTAGE TECHNOLOGY CO LTD-A | 18.5 |
| VICTORY GIANT TECHNOLOGY -A | 5.5 |
| GIGADEVICE SEMICONDUCTO-CL A | 8.4 |
| LUXSHARE PRECISION INDUSTR-A | 6.7 |
| SUZHOU DONGSHAN PRECISION-A | 3.3 |
| HYGON INFORMATION TECHNOLO-A | 8 |
| JIANGSU ZHONGTIAN TECHNOLO-A | 7.2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.80 versus 6.80 yesterday
- CNY per EUR 7.99 versus 8.00 yesterday
- Yield on 10-Year Government Bond 1.76% versus 1.76% yesterday
- Yield on 10-Year China Development Bank Bond 1.84% versus 1.84% yesterday
- Copper Price 0.65%
- Steel Price 0.21%
