Dual Sessions Policies Power Hong Kong Higher, Week in Review
6 Min. Read Time
Week in Review
- Asian equities were mostly lower this week on Middle East turmoil, though Malaysia managed a gain and Mainland China outperformed, while Korea and Thailand sold off the most.
- The Ministry of Foreign Affairs held a press conference on the Iran conflict and indicated that US President Trump's visit to China was still scheduled for next month.
- The "Dual Sessions" policy meetings began this week and will cuminate with the release of the final 15th Five Year Plan, which is expected to prioritize technological self-sufficiency and consumer spending growth.
- JD.com and Bilibili reported earnings this week. The former exceeded low expectations for top and bottom lines, though the growth comparison was challenged by a high base in 2024 due to trade-in subsidies. Video platform Bilibili delivered its first full year of profitability.
Friday's Key News
Asian equities ended a brutal week mostly lower on a higher US dollar, except for Hong Kong, which managed a strong gain. Australia, India, Indonesia, and Vietnam all fell more than 1% overnight. Korea's KOSPI fell nearly -14% for the week, despite the rally on Thursday. Meanwhile, Thailand fell -10.61%.
Mainland China and Hong Kong both grinded higher based on policy clarity from the ongoing "Dual Sessions" important government meetings. The press conference we noted yesterday took place at 3pm, after the Mainland market’s close. It included remarks from the heads of the National Development Reform Commission (NDRC), China's central bank the People's Bank of China (PBOC),the China Securities Regulatory Commission (CSRC), and the Ministry of Finance (MoF). Below I have compiled some highlights from the conference.
- The PBOC’s Pan Gongsheng stated “we will flexibly and efficiently use various monetary policy tools such as reserve requirement ratio reduction and interest rate reduction”. Interestingly, he also mentioned that China would not depreciate the currency.
- The MoF’s Lan Foan stated “central finance has specially arranged CNY 100 billion to launch a package of fiscal and financial coordination policies to promote domestic demand, and the policy of exchanging old consumer goods for new ones this year is significantly greater than last year”. He also noted the central government had allocated CNY 10.42 trillion to local governments.
- The NDRC head stated China’s GDP should exceed RMB 6 trillion in 2026.
Today’s market action was largely driven by investors' response to policy directives.
JD.com gained +9.95% following better-than-expected Q4 financial results and optimism that the worst of the debilitating instant commerce price war is behind us. It is worth noting that JD’s US listing is only up about 4% this morning. Local investors, when given the same piece of information, reacted more strongly. Interestingly, Bilibili’s US listing fell -0.31%, while the Hong Kong shares were down -4.46%.
BYD gained +2.27% after its release of EV charging stations capable of a full charge in 9 minutes and new blade batteries. At the release event, BYD CEO Wang Chengfu noted that there are 322 million gas-powered cars in China versus 45 million electric vehicles (EVs).
Healthcare was the top-performing sector due to Premier Li’s Government Work Report highlighting policy support for biotech and the launch of Innovative Drugs Directory for Commercial Health Insurance. The latter appears to be an expansion of China’s healthcare system. The mention of technology and artificial intelligence (AI) by Premier Li led to a rally, led by growth stocks, though it was quite broad, except for non-ferrous metals.
Tencent gained +3.39% was the most-heavily traded stock by value overnight, thanks to another day of strong inflow from Mainland China. Alibaba gained +3.48% and was the second-most heavily traded stock by value, as Mainland investors were net sellers, again, albeit at a slower pace, though it had two large call option block trades.
The number of Hong Kong-listed stocks eligible for Southbound Stock Connect also expanded by forty four, including several biotech stocks, which may have contributed to the outperformance of the subsector. It is interesting that Mainland investors were net sellers of Hong Kong-listed stocks and ETFs via Southbound Stock Connect, selling a net -$279 million, following yesterday’s massive sale of -$3.55 billion of outflow concentrated in Hong Kong-listed ETFs.
Mainland China also had a strong day, except for oil & gas, non-ferrous metals, and a few technology hardware names.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1.7% |
| Hang Seng Tech | HSTECH Index | 3.2% |
| Hong Kong Turnover | HKTurn Index | -9% |
| Hong Kong Short Sale Turnover | HKSST Index | -12% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15.4% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -279.423627075351 |
| China (Shanghai) | SHCOMP Index | 0.4% |
| China (Shenzhen) | SZCOMP Index | 1% |
| China (STAR Board) | Star50 Index | 0.6% |
| Mainland Turnover | .chturn Index | -7.9% |
| Japan | NKY Index | 0.6% |
| India | SENSEX Index | -1.4% |
| Indonesia | JCI Index | -1.6% |
| Malaysia | FBMKLCI Index | 0.3% |
| Pakistan | KSE100 Index | -2.1% |
| Philippines | PCOMP Index | -0.9% |
| South Korea | KOSPI Index | 0% |
| Taiwan | TWSE Index | -0.2% |
| Thailand | SET Index | -0.5% |
| Singapore | STI Index | 0% |
| Australia | AS51 Index | -1% |
| Vietnam | VNINDEX Index | -2.2% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 114 | 100 |
| Advancing Stocks | 382 | 4035 |
| Declining Stocks | 114 | 1042 |
| Outperforming Factors | Growth, Liquidity, Buyback | Quality, Low Volatility, Dividend Yield |
| Underperforming Factors | Value | Momentum, EPS Revision |
| Top Sectors | Healthcare, Consumer Discretionary, Communication Services | Healthcare, Staples, Industrials |
| Bottom Sectors | Materials, Utilities, Energy | Energy, Materials, Tech |
| Top Subsectors | Consumer Discretionary Distribution, Household Products, Pharmaceuticals | Agricultural, Food, Fertilizer |
| Bottom Subsectors | Non Ferrous Metal, Steel | Energy Equipment, Oil/Gas, Gas |
| Southbound Connect Buys | Tencent (Very Large) | N/A |
| Southbound Connect Sells | Alibaba, Shandong Molong, SMIC (Moderate), CNOOC, Transthera, Xiaomi, YOFC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | 2.39 |
| Communication Services | 11 | 3.33 |
| Consumer Discretionary | 28 | 3.65 |
| Consumer Staples | 13 | 2.99 |
| Energy | 6 | 0.92 |
| Financials | 25 | 0.94 |
| Health Care | 16 | 3.9 |
| Industrials | 22 | 1.65 |
| Information Technology | 12 | 2.01 |
| Materials | 14 | -2.2 |
| Real Estate | 7 | 1.8 |
| Utilities | 11 | 0.25 |
| Mainland China Listed | 386 | 0.17 |
| Communication Services | 8 | 0.35 |
| Consumer Discretionary | 26 | 0.03 |
| Consumer Staples | 19 | 1.34 |
| Energy | 12 | -1.68 |
| Financials | 64 | 0.34 |
| Health Care | 31 | 2.28 |
| Industrials | 58 | 0.8 |
| Information Technology | 95 | -0.3 |
| Materials | 52 | -0.82 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 3.4 |
| Alibaba HK | 9988 HK Equity | 3.5 |
| JD.com HK | 9618 HK Equity | 10 |
| NetEase HK | 9999 HK Equity | 5.2 |
| Yum China HK | 9987 HK Equity | 3.5 |
| Baozun HK | 9991 HK Equity | 1.3 |
| Baidu HK | 9888 HK Equity | 3.1 |
| Autohome HK | 2518 HK Equity | 0.9 |
| Bilibili HK | 9626 HK Equity | -4.5 |
| Trip.com HK | 9961 HK Equity | 7.2 |
| EDU HK | 9901 HK Equity | 1.7 |
| Xpeng HK | 9868 HK Equity | 4.2 |
| Weibo HK | 9898 HK Equity | 2.3 |
| Li Auto HK | 2015 HK Equity | 2.8 |
| Nio Auto HK | 9866 HK Equity | 1.6 |
| Zhihu HK | 2390 HK Equity | 2.2 |
| KE HK | 2423 HK Equity | 2 |
| Tencent Music Entertainment HK | 1698 HK Equity | 1 |
| Meituan HK | 3690 HK Equity | 3.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 3.4 |
| ALIBABA GROUP HOLDING LTD | 3.5 |
| XIAOMI CORP-CLASS B | 3.8 |
| MEITUAN-CLASS B | 3.2 |
| BYD CO LTD-H | 2.3 |
| HSBC HOLDINGS PLC | 1 |
| JD.COM INC-CLASS A | 10 |
| SEMICONDUCTOR MANUFACTURI-H | 0.5 |
| YANGTZE OPTICAL FIBRE AND-H | -7.8 |
| CNOOC LTD-H | -0.9 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EOPTOLINK TECHNOLOGY INC L-A | 0.2 |
| HGTECH CO LTD-A | 7.7 |
| TBEA CO LTD-A | -1.7 |
| ADDSINO CO LTD -A | 3.3 |
| ZHONGJI INNOLIGHT CO LTD-A | -2.1 |
| BIWIN STORAGE TECHNOLOGY C-A | 9.3 |
| SUZHOU TFC OPTICAL COMMUNI-A | -3.6 |
| CHINA XD ELECTRIC CO LTD-A | 6.6 |
| BEIJING TEAMSUN TECHNOLOGY-A | 4.9 |
| SHANGHAI STONEHILL TECHNOL-A | 0.7 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.91 versus 6.91 yesterday
- CNY per EUR 7.98 versus 8.01 yesterday
- Yield on 10-Year Government Bond 1.78% versus 1.78% yesterday
- Yield on 10-Year China Development Bank Bond 1.92% versus 1.92% yesterday
- Copper Price -0.54%
- Steel Price -0.03%
