Renminbi Hits New 52-Week High Versus US Dollar, Growth Stock Profit Taking On Light Volumes
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Key News
Asian equities were mixed on light volumes as South Korea outperformed.
CNY hit another 52-week high versus the US dollar. Yesterday’s growth outperformers were hit with profit taking as the markets’ early gains faded. Volumes were light, especially in Hong Kong, though the amount of advancers versus decliners held up better than the Mainland. With the pressure on growth stocks and sectors, both Hong Kong and Mainland markets had a significant value bias today.
Examples of profit taking include ZTE, which was down -5.63% after their ByteDance cell phone deal announcement, and battery giant CATL, which was down -1.08% after yesterday’s pop. A few growth names bucked the trend, including the most heavily traded stocks by value: Alibaba, which gained +1.36%, Xiaomi, which gained +0.99%, and Kuiashou, which gained +0.88%. Tencent was off slightly, down -0.40%.
Sell side analysts lowered their Meituan price targets after Friday’s Q3 results. Auto stocks were mixed following yesterday’s November report, which totaled 480,200 total sales. BYD gained +2.19% on healthy call option buying, though Xpeng fell -5.52%, Li Auto fell -0.78%, and NIO fell -6.74%.
The real estate sector was weak, driven by the poor performance of distressed state-owned real estate developer Vanke’s bonds. As mentioned previously, the company is pushing out a $283 million bond repayment due on December 15th, which has brought into question the solvency of the firm despite it effectively being taken over by the Shenzhen municipal government. I suspect creditors will kick the can further out, though the sector is meaningless for equity investors as it accounts for only 1.45% of MSCI China.
For the life of me, I can’t find the dates for the China Economic Work Conference (CWC), which should give us further clarity on stimulus policies. The South China Morning Post wrote that there are 777 million deliveries a day in China, on average, totaling 180 billion year-to-date. The article states, “What you are seeing is more packages, which should not be taken as an indication that household spending is increasing,” said Montufar-Helu of Ankura Consulting. Discounts are rampant, which is pressuring margins.
The National Development and Reform Commission (NDRC) Director Zheng Gangjie published an article in Party Building Magazine concisely titled “Deeply study and implement the spirit of the 4th Plenary Session of the 20th CPC Central Committee with new achievements in high-quality development". The article reviews achievements accomplished during the 14th Five Year Plan (FYP) before pivoting to plans on executing on the 15th Plan. There is an emphasis on twelve key fields ranging from “traditional industries, cultivate and strengthen emerging and future industries”.
As emphasized in the 15th FYP draft, two other themes jumped out: technology self-reliance and domestic consumption. On the former it stated “accelerate high-level self-reliance in science and technology” while on the latter “expanding domestic demand, vigorously boost consumption”. Aligning your portfolio with government policies is critical for China investing as we don’t need Sherlock Holmes to figure out where emphasis is being placed in 2026 and beyond.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.2% |
| Hang Seng Tech | HSTECH Index | -0.4% |
| Hong Kong Turnover | HKTurn Index | -11.3% |
| Hong Kong Short Sale Turnover | HKSST Index | -12.6% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 15.4% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 523.76 |
| China (Shanghai) | SHCOMP Index | -0.4% |
| China (Shenzhen) | SZCOMP Index | -0.7% |
| China (STAR Board) | Star50 Index | -1.2% |
| Mainland Turnover | .chturn Index | -15% |
| Northbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | Not Available |
| Jing Daily China Global Luxury Index | CHINALUX Index | 0.2% |
| Japan | NKY Index | 0% |
| India | SENSEX Index | -0.6% |
| Indonesia | JCI Index | 0.8% |
| Malaysia | FBMKLCI Index | 0.4% |
| Pakistan | KSE100 Index | -0.1% |
| Philippines | PCOMP Index | 0.1% |
| South Korea | KOSPI Index | 1.9% |
| Taiwan | TWSE Index | 0.8% |
| Thailand | SET Index | 0.1% |
| Singapore | STI Index | 0.3% |
| Australia | AS51 Index | 0.2% |
| Vietnam | VNINDEX Index | 0.9% |
| Indicator | Hong Kong | Mainland |
|---|---|---|
| Today's Volume % of 1-Year Average | 72% | 94% |
| Advancing Stocks | 259 | 1501 |
| Declining Stocks | 220 | 3470 |
| Outperforming Factors | Dividend Yield, Value, Large Caps | Dividend Yield |
| Underperforming Factors | Liquidity, Momentum | Liquidity, Momentum, Quality |
| Top Sectors | Energy, Utilities, Industrials | Utilities, Discretionary |
| Bottom Sectors | Healthcare, Real Estate, Staples | Communication, Healthcare, Materials |
| Top Subsectors | Industry Conglomerates, Environmental Protection, Household/Personal Products | Forest, Construction Machinery, Office Supplies |
| Bottom Subsectors | Consumer Staples Distribution, Pharmaceuticals, Semis | Marine, Biotech, Education |
| Southbound Connect Buys | Meituan (Moderate), Alibaba, CNOOC, Kuiashou, Xiaomi (Small), Xpeng, ZTE (Tiny) | |
| Southbound Connect Sells | Tencent (Small), SMIC (Tiny) |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 160 | 0.15 |
| Communication Services | 11 | -0.27 |
| Consumer Discretionary | 28 | 0.37 |
| Consumer Staples | 13 | -0.28 |
| Energy | 6 | 1.39 |
| Financials | 25 | 0.39 |
| Health Care | 15 | -1.24 |
| Industrials | 21 | 0.79 |
| Information Technology | 12 | 0.59 |
| Materials | 10 | 0.33 |
| Real Estate | 7 | -0.59 |
| Utilities | 12 | 1.25 |
| Mainland China Listed | 385 | -0.53 |
| Communication Services | 8 | -1.77 |
| Consumer Discretionary | 28 | 0.11 |
| Consumer Staples | 21 | -0.8 |
| Energy | 12 | -0.75 |
| Financials | 66 | -0.29 |
| Health Care | 33 | -1.29 |
| Industrials | 57 | -0.52 |
| Information Technology | 91 | -0.49 |
| Materials | 49 | -0.97 |
| Real Estate | 6 | -0.45 |
| Utilities | 14 | 0.25 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.4 |
| Alibaba HK | 9988 HK Equity | 1.4 |
| JD.com HK | 9618 HK Equity | -0.9 |
| NetEase HK | 9999 HK Equity | 0.9 |
| Yum China HK | 9987 HK Equity | 0.5 |
| Baozun HK | 9991 HK Equity | 0.3 |
| Baidu HK | 9888 HK Equity | 0.1 |
| Autohome HK | 2518 HK Equity | 0 |
| Bilibili HK | 9626 HK Equity | -1.8 |
| Trip.com HK | 9961 HK Equity | -0.2 |
| EDU HK | 9901 HK Equity | -0.5 |
| Xpeng HK | 9868 HK Equity | -5.5 |
| Weibo HK | 9898 HK Equity | 1.3 |
| Li Auto HK | 2015 HK Equity | -0.8 |
| Nio Auto HK | 9866 HK Equity | -6.7 |
| Zhihu HK | 2390 HK Equity | -5.1 |
| KE HK | 2423 HK Equity | -1.7 |
| Tencent Music Entertainment HK | 1698 HK Equity | -0.6 |
| Meituan HK | 3690 HK Equity | -3.1 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | 1.4 |
| MEITUAN-CLASS B | -3.1 |
| TENCENT HOLDINGS LTD | -0.4 |
| XIAOMI CORP-CLASS B | 1 |
| KUAISHOU TECHNOLOGY | 0.9 |
| BYD CO LTD-H | 2.2 |
| ZTE CORP-H | -5.6 |
| XPENG INC - CLASS A SHARES | -5.5 |
| ZIJIN MINING GROUP CO LTD-H | 1.2 |
| POP MART INTERNATIONAL GROUP | 1.7 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| VISUAL CHINA GROUP CO LTD-A | 0.5 |
| SHANTUI CONSTRUCTION MACHI-A | -0.8 |
| ZTE CORP-A | -1.7 |
| ZHONGJI INNOLIGHT CO LTD-A | 0.7 |
| EOPTOLINK TECHNOLOGY INC L-A | 2.6 |
| FOXCONN INDUSTRIAL INTERNE-A | 1.9 |
| LUXSHARE PRECISION INDUSTR-A | 2.4 |
| SAI MICROELECTRONICS INC-A | 15.3 |
| VICTORY GIANT TECHNOLOGY -A | 1.3 |
| BLUEFOCUS INTELLIGENT COMM-A | -2.8 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 7.06 versus 7.07 yesterday
- CNY per EUR 8.20 versus 8.23 yesterday
- Yield on 10-Year Government Bond 1.84% versus 1.84% yesterday
- Yield on 10-Year China Development Bank Bond 1.91% versus 1.90% yesterday
- Copper Price +0.29%
- Steel Price +0.42%
