Growth Stocks Shine On Policy Support
5 Min. Read Time
Key News
Asian equities were mostly lower amid geopolitical turbulence, except for Hong Kong, Mainland China, and Thailand, which managed gains.
Trump and Greenland have garnered all the Davos headlines, though Treasury Secretary Bessent met with China’s Vice Premier on Monday, while US Trade Representative Greer stated yesterday that a US-China meeting should occur before Trump and Xi’s April summit to discuss other deals. The Ministry of Foreign Affairs suggested that this was a good idea during today's daily press conference.
Yesterday’s Ministry of Finance (MoF) release on “boosting consumption and expanding private investment” garnered more headlines overnight, with one media source calling it “major fiscal stimulus to boost domestic demand.” I didn't see any coverage in Western media on the MoF release.
Mainland media reported that PDD Holdings, which has declined by 24% since November 10th, will be fined RMB 100,000 by Shanghai for improper tax filing. $48 billion of market cap was lost in what turns out to be an inconsequential fine, though, obviously, we don’t know whether PDD is out of the woods completely, nor should we expect their perpetually silent management to provide any guidance.
The Ministry of Industry and Information Technology (MIIT) held a press conference in conjunction with the State Council titled “Major goals and tasks for industrial and information technology development by 2025 have been successfully achieved”. The press conference likely contributed to the growth overperformance in both markets, as it and the Q&A focused on domestic consumption, “AI + Manufacturing,” and humanoid robotics.
Hong Kong was led higher by growth stocks and AI-related names. Alibaba gained +2.19% after partnering with China Nuclear Power for data centers, Baidu gained +3.29%, and Kuaishou gained +3.62% as Kling AI reached 12 million daily users. Semiconductors, non-ferrous metals, oil & gas, and auto stocks were up as well, led by BYD, which gained +2.11%, and CATL, which gained +1.33%, after the US House passed the Self-Drive Act, which relaxes autonomous driving rules.
Meituan fell -0.05% after the company took revenge on JD.com for entering restaurant delivery by going after JD’s core electronics E-Commerce, offering Shenzhen residents 30-minute delivery with government subsidies on mobile phones, tablets, and smart watches.
Mainland investors bought a healthy $1.79 billion worth of Hong Kong-listed stocks and ETFs today via the Southbound Stock Connect. Mainland China was led higher by technology hardware, non-ferrous metals, and small caps. Meanwhile, large and mega-cap stocks, including banks, insurance, alcohol, and telecommunications, were all down. However, the mega-cap and value-focused Shanghai ended higher +0.08%, and the semiconductor-heavy STAR Board gained +3.53%.
Solar stocks were affected by the cancellation of export rebates, seen as a sign of the anti-involution campaign and as a response to complaints from the US and EU about overcapacity. Three Mainland China-listed ETFs favored by the National Team, tickers 510300, 510300, and 510310, had another day of large selling and net outflow. Nine ETFs have seen US$41.1 billion in outflows in the last week as onshore regulators tap the brakes on the Mainland rally, and the Shanghai and Shenzhen markets have been basically flat over the last seven trading days. Regulators appear to prefer a "slow bull market".
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.4% |
| Hang Seng Tech | HSTECH Index | 1.1% |
| Hong Kong Turnover | HKTurn Index | 5.3% |
| Hong Kong Short Sale Turnover | HKSST Index | 26.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1,779.06 |
| China (Shanghai) | SHCOMP Index | 0.1% |
| China (Shenzhen) | SZCOMP Index | 0.6% |
| China (STAR Board) | Star50 Index | 3.5% |
| Mainland Turnover | .chturn Index | -6.5% |
| 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 | -1.4% |
| Malaysia | FBMKLCI Index | 0.4% |
| Pakistan | KSE100 Index | -0.9% |
| Philippines | PCOMP Index | -0.4% |
| South Korea | KOSPI Index | 0.5% |
| Taiwan | TWSE Index | -1.6% |
| Thailand | SET Index | 1.6% |
| Singapore | STI Index | -0.4% |
| Australia | AS51 Index | -0.4% |
| Vietnam | VNINDEX Index | -0.4% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 97% | 144% |
| Advancing Stocks | 276 | 2939 |
| Declining Stocks | 203 | 2040 |
| Outperforming Factors | Liquidity, Momentum, Growth | Momentum, Liquidity, Growth |
| Underperforming Factors | Value | Low Volatility, Dividend Yield, Value |
| Top Sectors | Materials, Discretionary, Industrials | Tech, Materials, Real Estate |
| Bottom Sectors | Real Estate, Financials | Staples, Financials, Utilities |
| Top Subsectors | Semis, Non Ferrous Metal, Petroleum/Petrochemical | Precious Metals, Energy Equipment, Computer Hardware |
| Bottom Subsectors | Consumer Durables/Apparel, Construction Materials, Textiles | Forest, Soft Drink, Telecom |
| Southbound Connect Buys | HS China Enterprise ETF, HK Tracker ETF (Very Large), Alibaba, Kuiashou (Large), Xiaomi (Moderate), SMIC (Small) | |
| Southbound Connect Sells | Tencent (Small) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | 0.49 |
| Communication Services | 11 | 0.33 |
| Consumer Discretionary | 28 | 1.23 |
| Consumer Staples | 13 | 0.47 |
| Energy | 6 | 0.9 |
| Financials | 25 | -0.92 |
| Health Care | 15 | 0.62 |
| Industrials | 21 | 0.97 |
| Information Technology | 12 | 0.27 |
| Materials | 10 | 2.6 |
| Real Estate | 7 | -1.09 |
| Utilities | 12 | 0.14 |
| Mainland China Listed | 386 | 0.15 |
| Communication Services | 8 | -0.58 |
| Consumer Discretionary | 28 | -0.53 |
| Consumer Staples | 21 | -1.72 |
| Energy | 12 | -0.96 |
| Financials | 66 | -1.33 |
| Health Care | 33 | -0.67 |
| Industrials | 57 | -0.22 |
| Information Technology | 91 | 2.43 |
| Materials | 49 | 1.53 |
| Real Estate | 6 | 0.13 |
| Utilities | 14 | -1.33 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.2 |
| Alibaba HK | 9988 HK Equity | 2.2 |
| JD.com HK | 9618 HK Equity | 0.4 |
| NetEase HK | 9999 HK Equity | -3.7 |
| Yum China HK | 9987 HK Equity | 1.1 |
| Baozun HK | 9991 HK Equity | 1.6 |
| Baidu HK | 9888 HK Equity | 3.3 |
| Autohome HK | 2518 HK Equity | -1.1 |
| Bilibili HK | 9626 HK Equity | 2.1 |
| Trip.com HK | 9961 HK Equity | 0.5 |
| EDU HK | 9901 HK Equity | 1.2 |
| Xpeng HK | 9868 HK Equity | -0.3 |
| Weibo HK | 9898 HK Equity | 1.1 |
| Li Auto HK | 2015 HK Equity | 1.8 |
| Nio Auto HK | 9866 HK Equity | -1 |
| Zhihu HK | 2390 HK Equity | 3.6 |
| KE HK | 2423 HK Equity | -0.3 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.5 |
| Meituan HK | 3690 HK Equity | -0.1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 2.2 |
| TENCENT HOLDINGS LTD | 0.2 |
| XIAOMI CORP-CLASS B | -0.2 |
| SEMICONDUCTOR MANUFACTURI-H | 3.7 |
| MEITUAN-CLASS B | -0.1 |
| CHINA MOBILE LTD-H | -0.1 |
| BAIDU INC-CLASS A | 3.3 |
| ANTA SPORTS PRODUCTS LTD | -4.2 |
| KUAISHOU TECHNOLOGY | 3.6 |
| HUA HONG SEMICONDUCTOR LTD-H | 5.2 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| HYGON INFORMATION TECHNOLO-A | 13.3 |
| TBEA CO LTD-A | -3.8 |
| EOPTOLINK TECHNOLOGY INC L-A | 3.2 |
| CHINA AEROSPACE TIMES ELEC-A | 2.4 |
| SHENZHEN SUNWAY COMMUNICAT-A | -10.2 |
| ZHONGJI INNOLIGHT CO LTD-A | -0.5 |
| ZIJIN MINING GROUP CO LTD-A | 2.2 |
| MONTAGE TECHNOLOGY CO LTD-A | 11.9 |
| CONTEMPORARY AMPEREX TECHN-A | 0.1 |
| GIGADEVICE SEMICONDUCTO-CL A | 5.4 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.96 versus 6.95 yesterday
- CNY per EUR 8.15 versus 8.16 yesterday
- Yield on 10-Year Government Bond 1.83% versus 1.83% yesterday
- Yield on 10-Year China Development Bank Bond 1.95% versus 1.96% yesterday
- Copper Price -0.81%
- Steel Price -0.48%
