Regulator’s New Rule: No Subsidies, Immediately!
6 Min. Read Time
Key News
Asian equities' truce optimism faded a touch overnight on light volumes and a stronger US dollar. Meanwhile, the Philippines was closed for Araw ng Kagitingan, which is a "Day of Valor" commemorating the courage and sacrifice of Filipino and US troops in the Fall of Bataan and subsequent Bataan Death March. If you want a deep dive on World War II in Asia, check out Dan Carlin’s Hardcore History podcast titled "Supernova in The East".
Mainland media noted that, after the close, Iran’s Deputy Foreign Minister said the Strait of Hormuz was open and that reports to the contrary were false. The Ministry of Commerce (MoC) noted that rare earth export controls to the US will be suspended until November 10th, 2026.
Markets did not react to the following development overnight because it was reported after the close. But, the State Administration of Market Regulation (SAMR), National Development and Reform Commission (NDRC), and the Cyberspace Administration of China (CAC) convened for the "Internet Platform Price Compliance Guidance Meeting" to “guide” internet companies on the implementation of "Rules on Price Behavior of Internet Platforms", which aim to “regulate price competition behavior”.
Specifically, the release on SAMR’s website states:
- “The meeting reported on price compliance issues existing in some platform companies, and required platform companies to immediately rectify the problems.”
- “The meeting emphasized that platform companies must strictly regulate their subsidy practices, resolutely curb vicious price competition.”
- “Market regulators will implement the decisions and plans of the Central Committee and the State Council, continuously strengthen price competition supervision, thoroughly rectify "involutionary" competition, and effectively safeguard a fair competitive market environment.”
- The rules will take effect tomorrow, April 10th.
The statement on SAMR’s website is time-stamped April 9th, 2026 at 4:30 pm China Time. This is therefore a China Last Night exclusive and should be a market-moving event, in my opinion. I will put the document up on X/Twitter @ahern_brendan).
Hong Kong and Mainland China had a choppy session, on light volumes amid uncertainty over the truce, as little capital was committed. Tencent, which gained +0.10%, was Hong Kong’s most heavily traded stock by value. Tencent benefited from reports that its cloud business will raise prices due to demand. The company repurchased 1.96 million shares today, following yesterday’s 1.98 million share buyback, which is above their daily average of about 615 million. Alibaba fell -2.85% on an analyst downgrade. Meanwhile, banks outperformed, while yesterday’s growth stock outperformers underperformed.
Mainland investors bought a net $1.61 billion worth of Hong Kong-listed stocks and ETFs via Southbound Stock Connect overnight. However, this accounted for only 19% of Hong Kong turnover, whereas we usually see 20% or above. Mainland China was down, as insurance, beverages, semiconductors, and autos all underperformed. The Mainland-listed China equity ETFs favored by the "National Team", i.e. investment firms associated with China's sovereign wealth, saw average volumes, as inflows picked up from a low base again. It was a fairly quiet night, though.
BHP’s new CEO, Brandon Craig, will immediately head to China to meet with his biggest clients, including Aluminum Corp of China.
I’ve spent the last twenty-five years in the ETF and passive investment space, which explains why I’m a student of index methodologies. While ETFs and index funds have become exceedingly popular, garnering trillions in assets under managemen (AUM), there tends to be very little examination of the indexes that dictate how that money is allocated. If you knew the largest investor in the world was going to buy a stock, would you buy it? Heck ya! Yesterday, FTSE confirmed that Vietnam will be upgraded from its Frontier Market indexess to its Emerging Market indexes in four stages, beginning in September. While MSCI’s benchmarked Emerging Market AUM is far larger than FTSE’s, the inflows into Vietnam could be significant. It is going to be fun to watch this, and profitable for some!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.5% |
| Hang Seng Tech | HSTECH Index | -2.1% |
| Hong Kong Turnover | HKTurn Index | -34.2% |
| Hong Kong Short Sale Turnover | HKSST Index | -28% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 18.4% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 1,608.28 |
| China (Shanghai) | SHCOMP Index | -0.7% |
| China (Shenzhen) | SZCOMP Index | -0.6% |
| China (STAR Board) | Star50 Index | -0.6% |
| Mainland Turnover | .chturn Index | -12.3% |
| Japan | NKY Index | -0.7% |
| India | SENSEX Index | -1.2% |
| Indonesia | JCI Index | 0.4% |
| Malaysia | FBMKLCI Index | -0.6% |
| Pakistan | KSE100 Index | -0.4% |
| Philippines | PCOMP Index | 2.2% |
| South Korea | KOSPI Index | -1.6% |
| Taiwan | TWSE Index | 0.3% |
| Thailand | SET Index | 0.3% |
| Singapore | STI Index | -0.4% |
| Australia | AS51 Index | 0.2% |
| Vietnam | VNINDEX Index | -1.1% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 95 | 108 |
| Advancing Stocks | 155 | 1140 |
| Declining Stocks | 349 | 3972 |
| Outperforming Factors | Quality, Low Volatility, Momentum | Growth |
| Underperforming Factors | Growth, Liquidity, Buyback | Quality, Value, Dividend Yield |
| Top Sectors | Utilities, Energy, Industrial | Tech |
| Bottom Sectors | Tech, Discretionary, Staples | Communication, Discretionary, Healthcare |
| Top Subsectors | Petroleum, Environmental Protection, Commercial/Professional Services | Communication Equipment, Electronic Components, Oil/Gas |
| Bottom Subsectors | Media/Entertainment, Consumer Staples Distribution, Paper/Packaging | Software, Soft Drink, Chemical |
| Southbound Connect Buys | Alibaba (Large), HS Tech ETF, Pop Mart, Xiaomi (Moderate) | N/A |
| Southbound Connect Sells | CNOOC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 164 | -0.87 |
| Communication Services | 11 | -0.35 |
| Consumer Discretionary | 28 | -1.87 |
| Consumer Staples | 12 | -1.32 |
| Energy | 6 | 0.19 |
| Financials | 25 | -0.18 |
| Health Care | 16 | -0.68 |
| Industrials | 19 | 0.14 |
| Information Technology | 15 | -2.27 |
| Materials | 14 | -0.55 |
| Real Estate | 1 | 0.11 |
| Utilities | 6 | 0.3 |
| Mainland China Listed | 11 | -0.88 |
| Communication Services | 11 | -2.2 |
| Consumer Discretionary | 26 | -1.88 |
| Consumer Staples | 18 | -1.15 |
| Energy | 11 | -0.45 |
| Financials | 64 | -1.59 |
| Health Care | 29 | -1.69 |
| Industrials | 60 | -0.99 |
| Information Technology | 113 | 0.04 |
| Materials | 58 | -0.5 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 0.1 |
| Alibaba HK | 9988 HK Equity | -2.8 |
| JD.com HK | 9618 HK Equity | -0.2 |
| NetEase HK | 9999 HK Equity | -0.9 |
| Yum China HK | 9987 HK Equity | 0.4 |
| Baozun HK | 9991 HK Equity | 0.2 |
| Baidu HK | 9888 HK Equity | -1.8 |
| Autohome HK | 2518 HK Equity | 1.2 |
| Bilibili HK | 9626 HK Equity | -1.3 |
| Trip.com HK | 9961 HK Equity | -1.8 |
| EDU HK | 9901 HK Equity | -0.1 |
| Xpeng HK | 9868 HK Equity | -5.4 |
| Weibo HK | 9898 HK Equity | -1.9 |
| Li Auto HK | 2015 HK Equity | -1.9 |
| Nio Auto HK | 9866 HK Equity | 2.2 |
| Zhihu HK | 2390 HK Equity | 2.9 |
| KE HK | 2423 HK Equity | 2 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.8 |
| Meituan HK | 3690 HK Equity | -0.6 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 0.1 |
| ALIBABA GROUP HOLDING LTD | -2.8 |
| YANGTZE OPTICAL FIBRE AND-H | 18.9 |
| XIAOMI CORP-CLASS B | 6.1 |
| POP MART INTERNATIONAL GROUP | 7.6 |
| CNOOC LTD-H | -3.3 |
| BYD CO LTD-H | -4.7 |
| MEITUAN-CLASS B | -0.6 |
| SEMICONDUCTOR MANUFACTURI-H | 10.1 |
| KUAISHOU TECHNOLOGY | 4 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 11.1 |
| SUZHOU TFC OPTICAL COMMUNI-A | 6.2 |
| LUXSHARE PRECISION INDUSTR-A | 5.4 |
| EOPTOLINK TECHNOLOGY INC L-A | 9.3 |
| BLUEFOCUS INTELLIGENT COMM-A | 2.1 |
| HGTECH CO LTD-A | 4.1 |
| SUZHOU DONGSHAN PRECISION-A | 10 |
| CAMBRICON TECHNOLOGIES-A | 2.9 |
| HENGTONG OPTIC-ELECTRIC CO-A | 1.7 |
| GIGADEVICE SEMICONDUCTO-CL A | 2.5 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.84 versus 6.82 yesterday
- CNY per EUR 7.98 versus 7.98 yesterday
- Yield on 10-Year Government Bond 1.82% versus 1.81% yesterday
- Yield on 10-Year China Development Bank Bond 1.93% versus 1.93% yesterday
- Copper Price +0.63%
- Steel Price -0.10%
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