Rebound Under The Sword Of Damocles
5 Min. Read Time
Key News
Asian equity markets rebounded cautiously overnight on light volumes, led by Australia and Taiwan, on a weaker US dollar. Hong Kong remained closed following yesterday’s closure in observance of the Ching Ming Festival and Easter Monday.
The Renminbi appreciated versus the US dollar, closing at 6.86 CNY per USD, versus the pre-Iran conflict 52-week low of 6.84 CNY per USD. Resilient right?
While Mainland media headlines were dominated by President Xi’s letter to universities on “strengthening independent sci-tech innovation and talent cultivation”, the Ministry of Commerce (MoC) and five unnamed government agencies issued the concisely-titled document "Guiding Opinions on Better Serving the Real Economy and Promoting High-Quality Development of E-commerce". China Daily titled their article on the release: “China plans to foster AI-driven e-commerce". The article notes the release's focus on “integrating artificial intelligence into online retail platforms” and “explicitly encouraging the development of 'AI plus E-Commerce'".
The report recommends policy support to “leverage the advantages of e-commerce to help consolidate and strengthen the foundation of the real economy” and “advancing cross-border E-Commerce, expanding Silk Road E-Commerce". This appears to be a strong sign of support for E-Commerce companies, which makes sense considering the emphasis on raising domestic consumption in the 15th Five-Year Plan.
I also noticed a Mainland media article on Baidu confidentially filing for the Hong Kong listing of its chipmaker Kunlinxin, Baidu Biotech, and iQiyi. While the former has been well telegraphed, the latter two are more recent developments. Mainland China ended higher after bouncing around the room, led by semiconductor stocks following Samsung’s Q1 results.
Index heavyweights, such as bank stocks, were off, along with several mega-caps. Kweichow Moutai was down -1.37%, CATL fell -0.48%, and BYD fell -1.04%. Insurance stocks were also lower. The Mainland-listed China ETFs favored by the "National Team", i.e. investment firms associated with China's sovereign wealth, saw light volumes, though several had small inflows. The Shanghai and Shenzhen Composite indexes are sitting just above support levels, which could represent “lines in the sand” for technical analysts.
There were a few items worth noting overnight, including Mainland media articles on Apple’s foldable phone efforts struggling. The People's Bank of China (PBOC) increased its gold reserves by 160,000 ounces in March, bringing the total to 74.38 million ounces. Shenzhen will host the China Robot Industry Conference starting on April 10th. The first China-Canada Financial Working Group took place on April 3rd in Beijing. Cheng Li-wun, chairwoman of the Kuomintang (KMT), which is Taiwan's largest opposition party, arrived in China in order to meet with President Xi.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | Closed |
| Hang Seng Tech | HSTECH Index | Closed |
| Hong Kong Turnover | HKTurn Index | Closed |
| Hong Kong Short Sale Turnover | HKSST Index | Closed |
| Short Turnover as a % of Hong Kong Turnover | N/A | Closed |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Closed |
| China (Shanghai) | SHCOMP Index | 0.3% |
| China (Shenzhen) | SZCOMP Index | 0.8% |
| China (STAR Board) | Star50 Index | 1.4% |
| Mainland Turnover | .chturn Index | -2.4% |
| Japan | NKY Index | 0% |
| India | SENSEX Index | 0.7% |
| Indonesia | JCI Index | -0.3% |
| Malaysia | FBMKLCI Index | -0.2% |
| Pakistan | KSE100 Index | 0.4% |
| Philippines | PCOMP Index | 0.2% |
| South Korea | KOSPI Index | 0.8% |
| Taiwan | TWSE Index | 2% |
| Thailand | SET Index | 0.7% |
| Singapore | STI Index | -0.3% |
| Australia | AS51 Index | 1.7% |
| Vietnam | VNINDEX Index | 0.2% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | Closed | 82% |
| Advancing Stocks | Closed | 3771 |
| Declining Stocks | Closed | 1334 |
| Outperforming Factors | Closed | Low Volatility, Quality, Value |
| Underperforming Factors | Closed | Liquidity, Large Caps, Buyback |
| Top Sectors | Closed | Materials, Energy, Tech |
| Bottom Sectors | Closed | Utilities, Staples, Financials |
| Top Subsectors | Closed | Petrochemical, Leisure Products, Chemical Fiber Industry |
| Bottom Subsectors | Closed | Power Generation Equipment, Construction Machinery, Precious Metals |
| Southbound Connect Buys | Closed | N/A |
| Southbound Connect Sells | Closed | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | Closed |
| Communication Services | 11 | Closed |
| Consumer Discretionary | 28 | Closed |
| Consumer Staples | 12 | Closed |
| Energy | 6 | Closed |
| Financials | 25 | Closed |
| Health Care | 16 | Closed |
| Industrials | 19 | Closed |
| Information Technology | 15 | Closed |
| Materials | 14 | Closed |
| Real Estate | 1 | Closed |
| Utilities | 6 | Closed |
| Mainland China Listed | 11 | 0.52 |
| Communication Services | 11 | 1.14 |
| Consumer Discretionary | 26 | -0.05 |
| Consumer Staples | 18 | -0.45 |
| Energy | 11 | 1.78 |
| Financials | 64 | -0.35 |
| Health Care | 29 | 0.03 |
| Industrials | 60 | -0.2 |
| Information Technology | 113 | 1.27 |
| Materials | 58 | 2.32 |
| 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 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | 1.1 |
| SHANTUI CONSTRUCTION MACHI-A | 0.9 |
| CAMBRICON TECHNOLOGIES-A | 9.1 |
| ZHONGJI INNOLIGHT CO LTD-A | 2.1 |
| EOPTOLINK TECHNOLOGY INC L-A | 0.7 |
| SUZHOU TFC OPTICAL COMMUNI-A | -4.9 |
| HENGTONG OPTIC-ELECTRIC CO-A | 1.1 |
| CNPC CAPITAL CO LTD-A | 7.8 |
| CONTEMPORARY AMPEREX TECHN-A | -0.5 |
| BIWIN STORAGE TECHNOLOGY C-A | 3.4 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.86 versus 6.88 yesterday
- CNY per EUR 7.92 versus 7.94 yesterday
- Yield on 10-Year Government Bond 1.82% versus 1.82% yesterday
- Yield on 10-Year China Development Bank Bond 1.94% versus 1.95% yesterday
- Copper Price +0.47%
- Steel Price -0.19%
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