Extremely Hard Indeed
6 Min. Read Time
Key News
Asian equities took President Trump's comments on hitting Iran "extremely hard" literally, as markets were lower on a stronger US dollar, especially Korea, though India managed a small gain, and the Philippines was closed for "Maundy Thursday", which is often called "Holy Thursday" and commemorates Jesus' Last Supper with his disciples.
While China's massive oil inventories, reliance on renewable energy, and domestic coal for electricity generation make it better prepared than its Asian peers, its economy won't be immune to a global slowdown. Likewise, China's equity market will not be completely immune to risk-off days like today.
MSCI China's biggest weights were lower, as Tencent fell -1.49%, despite another large buyback and net buying from Mainland investors via Southbound Stock Connect, and Alibaba, which fell -3.42%, despite announcing another AI model. S&P Global reported that Alibaba's cloud business now has 32.4% market share in China. Weakness in insurer AIA, which fell -1.54%, indicates foreign flight, as the non-benchmark stock is where many managers hide. AIA is not part of the MSCI China Index because it is domiciled in Hong Kong and therefore part of MSCI Hong Kong, which is considered a developed market.
In both markets, oil & gas, coal, and high-yielding banks outperformed, while growth stocks were lower. An expectation of today's downdraft was the strong performance of new energy vehicles following strong March sales from Geely, which gained +8.37%, Chery Auto, which gained +15.26%, Li Auto, which gained +0.84%, Great Wall Motor, which gained +7.34%, and NIO, which gained +0.66%. However, BYD fell -0.76%, Xiaomi fell -3.56%, and XPeng fell -0.73%. The privately-held Leap Motors is said to be in talks with Stellantis regarding a potential partnership in Canada.
The Hong Kong Tracker ETF saw massive inflow from Mainland investors via Southbound Stock Connect. Theyy poured approximately HKD 8.5 billion ($1.1 billion) into the fund. Meanwhile, the Hang Seng China Enterprise ETF experienced a net inflow of HKD 2.6 billion. In aggregate, Mainland investors bought a net $2.5 billion worth of Hong Kong-listed ETFs and stocks, bringing the year-to-date total to $29.2 billion.
Humanoid robotics maker UBTech gained +2.1% overnight following yesterday's better-than-expected revenue growth, driven by the sale of 1,079 humanoids, while net income loss narrowed. The stock is up nearly 20% since its earnings on Tuesday.
Investors pounded the Mainland-listed solar panel maker Sungrow for another -5.36% after yesterday's -10.81% decline, following poor financial results. Optical communications hardware giant and recent implicit AI play Zhongji Innolight fell -3.3%, despite talk of an Hong Kong IPO that could raise $3 billion.
The Mainland-listed China ETFs favored by the National Team continue to see below-average volumes and small outflows. With indices sitting at support, will the cavalry come to the rescue? Thus far, the answer has been no.
The Ministry of Commerce stated in a press conference that China will "Further leverage the role of the China-US trade consultation mechanism and strengthen dialogue and communication". That sounds positive to me!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.7% |
| Hang Seng Tech | HSTECH Index | -1.6% |
| Hong Kong Turnover | HKTurn Index | -16.4% |
| Hong Kong Short Sale Turnover | HKSST Index | 21.7% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 21.9% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 2,532.27 |
| China (Shanghai) | SHCOMP Index | -0.7% |
| China (Shenzhen) | SZCOMP Index | -1.6% |
| China (STAR Board) | Star50 Index | -2.8% |
| Mainland Turnover | .chturn Index | -8.4% |
| Japan | NKY Index | -2.4% |
| India | SENSEX Index | 0.3% |
| Indonesia | JCI Index | -2.2% |
| Malaysia | FBMKLCI Index | -0.6% |
| Pakistan | KSE100 Index | -2.5% |
| Philippines | PCOMP Index | 0.8% |
| South Korea | KOSPI Index | -4.5% |
| Taiwan | TWSE Index | -1.8% |
| Thailand | SET Index | -0.4% |
| Singapore | STI Index | -0.6% |
| Australia | AS51 Index | -1.1% |
| Vietnam | VNINDEX Index | -0.5% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 94 | 94 |
| Advancing Stocks | 224 | 972 |
| Declining Stocks | 276 | 4339 |
| Outperforming Factors | Low Volatility, Quality, Value | Low Volatility, Dividend Yield, Value |
| Underperforming Factors | Liquidity, Large Caps, Buybacks | Liquidity, Growth, Momentum |
| Top Sectors | Energy, Healthcare, Utilities | Energy, Staples |
| Bottom Sectors | Tech, Materials, Discretionary | Real Estate, Tech, Communication |
| Top Subsectors | Auto, Coal, Petroleum/Petrochemical | Energy Equipment, Marine, Oil/Gas |
| Bottom Subsectors | Semis, Software, Tech Hardware | Internet, Computer Hardware, Precious Metals |
| Southbound Connect Buys | HK Tracker ETF (Massive), HS China Enterprise ETF (Very Large), Xiaomi (Large), Tencent (Moderate) | |
| Southbound Connect Sells | CNOOC (Moderate), Alibaba (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -0.79 |
| Communication Services | 11 | -1.41 |
| Consumer Discretionary | 28 | -1.5 |
| Consumer Staples | 12 | 0.32 |
| Energy | 6 | 1.5 |
| Financials | 25 | 0.37 |
| Health Care | 16 | 1.05 |
| Industrials | 19 | 0.18 |
| Information Technology | 15 | -2.27 |
| Materials | 14 | -1.72 |
| Real Estate | 1 | -1.2 |
| Utilities | 6 | 0.52 |
| Mainland China Listed | 11 | -1.45 |
| Communication Services | 11 | -2.71 |
| Consumer Discretionary | 26 | -1.59 |
| Consumer Staples | 18 | 0.24 |
| Energy | 11 | 2.48 |
| Financials | 64 | -0.57 |
| Health Care | 29 | -0.54 |
| Industrials | 60 | -1.71 |
| Information Technology | 113 | -3.23 |
| Materials | 58 | -1.67 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.5 |
| Alibaba HK | 9988 HK Equity | -3.4 |
| JD.com HK | 9618 HK Equity | -0.9 |
| NetEase HK | 9999 HK Equity | -0.7 |
| Yum China HK | 9987 HK Equity | 0.7 |
| Baozun HK | 9991 HK Equity | 0 |
| Baidu HK | 9888 HK Equity | -0.7 |
| Autohome HK | 2518 HK Equity | -0.2 |
| Bilibili HK | 9626 HK Equity | -2.2 |
| Trip.com HK | 9961 HK Equity | -0.9 |
| EDU HK | 9901 HK Equity | -0.5 |
| Xpeng HK | 9868 HK Equity | -0.7 |
| Weibo HK | 9898 HK Equity | -0.7 |
| Li Auto HK | 2015 HK Equity | 0.8 |
| Nio Auto HK | 9866 HK Equity | 0.7 |
| Zhihu HK | 2390 HK Equity | -0.3 |
| KE HK | 2423 HK Equity | -0.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | -2.7 |
| Meituan HK | 3690 HK Equity | -2.1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -3.4 |
| TENCENT HOLDINGS LTD | -1.5 |
| XIAOMI CORP-CLASS B | -3.6 |
| CNOOC LTD-H | 0.2 |
| YANGTZE OPTICAL FIBRE AND-H | 1.7 |
| GEELY AUTOMOBILE HOLDINGS LT | 8.4 |
| SHANDONG MOLONG PETROLEUM-H | 16.4 |
| MEITUAN-CLASS B | -2.1 |
| SEMICONDUCTOR MANUFACTURI-H | -3.5 |
| POP MART INTERNATIONAL GROUP | -2.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| SUNGROW POWER SUPPLY CO LT-A | -5.4 |
| ZHONGJI INNOLIGHT CO LTD-A | -3.3 |
| EOPTOLINK TECHNOLOGY INC L-A | -2.8 |
| SUZHOU TFC OPTICAL COMMUNI-A | -3.2 |
| CONTEMPORARY AMPEREX TECHN-A | -1.1 |
| ZIJIN MINING GROUP CO LTD-A | -3 |
| FOXCONN INDUSTRIAL INTERNE-A | -2.5 |
| HENGTONG OPTIC-ELECTRIC CO-A | 2.8 |
| GANFENG LITHIUM GROUP CO L-A | 3.4 |
| CAMBRICON TECHNOLOGIES-A | -5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.89 versus 6.88 yesterday
- CNY per EUR 7.93 versus 7.98 yesterday
- Yield on 10-Year Government Bond 1.82% versus 1.82% yesterday
- Yield on 10-Year China Development Bank Bond 1.96% versus 1.96% yesterday
- Copper Price -0.32%
- Steel Price -0.74%
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