“Official” March PMIs Beat Estimates
5 Min. Read Time
Key News
Asian equities were mixed but mostly lower overnight as Pakistan and the Philippines outperformed, while Korea and Mainland China's STAR Market underperformed.
Hong Kong outperformed the Mainland overnight, the opposite of yesterday, while there was a slight valuer bias in both markets. Mainland investors bought a net $89 million worth of Hong Kong-listed stocks and ETFs overnight via Southbound Stock Connect, which is small compared to history, but it did reverse the net sale from yesterday. Xiaomi and Tencent were the top net buys from Southbound Stock Connect, while oil stock CNOOC was a net sell. Volumes were higher in Mainland China than in Hong Kong.
China's National Bureau of Statistics (NBS) released the "official" purchasing managers' indexes (PMIs) overnight. Both the Manufacturing and Non-Manufacturing PMIs exceeded economists' estimates for March, indicating expansion. The Manufacturing PMI was 50.4 versus an estimated 50.1 and February's 49.0, while the Non-Manufacturing PMI was 50.1 versus an estimated 49.9 and February's 49.5.
Yesterday, we discussed China's relative advantage when it comes to oil sourcing vis-a-vis the Iran conflict. This not reflected in last night's price action, though. Still, Mainland China has held up better do far this year, as it is local investors' definition of China, versus Hong Kong, which is foreign investor's definition.
China raised the caps on a popular outbound investment channel for local funds, which is called the Qualified Domestic Institutional Investor (QDII) program. The caps were raised to satisfy local demand for offshore investments and the move is in line with continued financial opening, a component of the 15th Five-Year Plan.
Chipmaker Shanghai Four Semi made its debut on the Hong Kong Stock Exchange overnight, where its share price doubled versus the deal price. This was in sharp contrast to the semiconductor industry overall, which was lower on reports of falling memory chip prices. Shares of China's chipmakers, such as Cambricon, which are mostly listed on the Mainland, have performed extremely well over the past year, so investors may be searching for reasons to take profits. Meanwhile, we believe that offshore-listed internet large caps like Alibaba, Tencent, and Baidu are becoming highly undervalued, as they are full-stack AI--forward value creators. Alibaba and Baidu now have their own, quite substantial chip design businesses that markets are not valuing properly, in our opinion.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.2% |
| Hang Seng Tech | HSTECH Index | -0.9% |
| Hong Kong Turnover | HKTurn Index | -10.4% |
| Hong Kong Short Sale Turnover | HKSST Index | -25.6% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15.8% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 89.83 |
| China (Shanghai) | SHCOMP Index | -0.8% |
| China (Shenzhen) | SZCOMP Index | -1.7% |
| China (STAR Board) | Star50 Index | -2.6% |
| Mainland Turnover | .chturn Index | 4% |
| Japan | NKY Index | -1.6% |
| India | SENSEX Index | -2.2% |
| Indonesia | JCI Index | -0.6% |
| Malaysia | FBMKLCI Index | 0.1% |
| Pakistan | KSE100 Index | 1.4% |
| Philippines | PCOMP Index | 1.4% |
| South Korea | KOSPI Index | -4.3% |
| Taiwan | TWSE Index | -2.4% |
| Thailand | SET Index | -0.1% |
| Singapore | STI Index | -0.2% |
| Australia | AS51 Index | 0.2% |
| Vietnam | VNINDEX Index | 0.7% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 99 | 102 |
| Advancing Stocks | 47 (Hang Seng) | 72 (CSI 300) |
| Declining Stocks | 42 (Hang Seng) | 227 (CSI 300) |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Financials, Consumer Staples, Communication Services | Communication Services, Financials, Consumer Staples |
| Bottom Sectors | Energy, Information Technology, Materials | Energy, Information Technology, Materials |
| Top Subsectors | Household Appliances, Banks, Telecommunication Services | Forest Industry, Household Appliances, Motorcycles |
| Bottom Subsectors | Semiconductors, Coal, Chemical Industry | Soft Drinks, Fertilizer & Pesticides, Coal |
| Southbound Connect Buys | Xiaomi, Tencent, Pop Mart | N/A |
| Southbound Connect Sells | CNOOC, SMIC, Alibaba | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -0.39 |
| Communication Services | 11 | 0.26 |
| Consumer Discretionary | 28 | -0.82 |
| Consumer Staples | 12 | 0.57 |
| Energy | 6 | -3.2 |
| Financials | 25 | 0.9 |
| Health Care | 16 | 0.26 |
| Industrials | 19 | -1.49 |
| Information Technology | 15 | -2.53 |
| Materials | 14 | -1.63 |
| Real Estate | 1 | -0.02 |
| Utilities | 6 | -1.22 |
| Mainland China Listed | 11 | -0.88 |
| Communication Services | 11 | 0.64 |
| Consumer Discretionary | 26 | 0.37 |
| Consumer Staples | 18 | 0.4 |
| Energy | 11 | -2.19 |
| Financials | 64 | 0.52 |
| Health Care | 29 | -0.57 |
| Industrials | 60 | -1.32 |
| Information Technology | 113 | -1.94 |
| Materials | 58 | -1.69 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.5 |
| Alibaba HK | 9988 HK Equity | -1.2 |
| JD.com HK | 9618 HK Equity | 0.2 |
| NetEase HK | 9999 HK Equity | -1.1 |
| Yum China HK | 9987 HK Equity | -0.5 |
| Baozun HK | 9991 HK Equity | 2.7 |
| Baidu HK | 9888 HK Equity | 0.1 |
| Autohome HK | 2518 HK Equity | 2.7 |
| Bilibili HK | 9626 HK Equity | -1.4 |
| Trip.com HK | 9961 HK Equity | -0.9 |
| EDU HK | 9901 HK Equity | 1.5 |
| Xpeng HK | 9868 HK Equity | -2.1 |
| Weibo HK | 9898 HK Equity | 0.1 |
| Li Auto HK | 2015 HK Equity | -1.6 |
| Nio Auto HK | 9866 HK Equity | 0.6 |
| Zhihu HK | 2390 HK Equity | 0.1 |
| KE HK | 2423 HK Equity | -3.1 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.3 |
| Meituan HK | 3690 HK Equity | -1.5 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 0.5 |
| ALIBABA GROUP HOLDING LTD | -1.2 |
| CNOOC LTD-H | -3.1 |
| YANGTZE OPTICAL FIBRE AND-H | -7.1 |
| XIAOMI CORP-CLASS B | -1.9 |
| POP MART INTERNATIONAL GROUP | -3.4 |
| MEITUAN-CLASS B | -1.5 |
| CHINA CONSTRUCTION BANK-H | 1.8 |
| BYD CO LTD-H | 0 |
| SEMICONDUCTOR MANUFACTURI-H | -1.4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | -3.3 |
| EOPTOLINK TECHNOLOGY INC L-A | -3.4 |
| FOXCONN INDUSTRIAL INTERNE-A | 4.4 |
| GIGADEVICE SEMICONDUCTO-CL A | -6.9 |
| CONTEMPORARY AMPEREX TECHN-A | -2.7 |
| SUNGROW POWER SUPPLY CO LT-A | -4 |
| HENGTONG OPTIC-ELECTRIC CO-A | -2.2 |
| BIWIN STORAGE TECHNOLOGY C-A | -8.6 |
| KWEICHOW MOUTAI CO LTD-A | 2.1 |
| ZIJIN MINING GROUP CO LTD-A | -0.2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.90 versus 6.91 yesterday
- CNY per EUR 7.94 versus 7.92 yesterday
- Yield on 10-Year Government Bond 1.82% versus 1.81% yesterday
- Yield on 10-Year China Development Bank Bond 1.95% versus 1.95% yesterday
- Copper Price 0.12%
- Steel Price -0.26%
