Risk Off Rules The Day
5 Min. Read Time
Key News
Attacks on Iran and the subsequent retaliatory attacks across the Middle East sent the US dollar higher and Asian equities lower, except for commodity-heavy Australia. Several markets were down significantly, including Singapore, Thailand, the Philippines, and especially Pakistan. South Korea was closed for Independence Movement Day.
The Ministry of Foreign Affairs' press conference seemed to indicate that President Trump’s China trip at the end of the month is still on. During the press conference, it was revealed that a Chinese citizen was killed in Iran, while the Ministry's spokesperson stressed that China did not sell any advanced anti-ship missiles to Iran when asked.
As the primary definition of China for global investors, Hong Kong had a classic and equally unfortunate risk-off day as oil & gas, coal, and non-ferrous metals rallied, while virtually everything else fell. However, BYD gained +4.37%, bucking the trend after announcing it will launch a “disruptive technology” at an unveiling on Thursday.
Alibaba fell -4.55% after an analyst cut their price target due to slower growth, higher AI capex, and the effects of the instant commerce price wars. We have been saying that we believe the worst is over for the "race to the bottom" in instant commerce. However, we need to see the E-Commerce total pie start growing again. Unfortunately, Alibaba and other key internet names have not yet reported Q4 earnings,. meaning that there is little other information to support the stocks. Most are expected to report in the next two weeks, though.
Tencent fell -0.77% despite a broker reiterating the stock as its top pick. Xiaomi fell -5.04% despite strong buying from Mainland China via Southbound Stock Connect and the company utilizing its humanoid robot for complex tasks in a factory for three hours.
Mainland investors bought a healthy net $2.07 billion worth of Hong Kong-listed stocks and ETFs today, as the Hang Seng Tech ETF and the Hong Kong Tracker ETF both saw strong inflows. China ETFs listed in Mainland China and utilized by the "National Team" had below average volumes, indicating no buying today from institutional investors.
Similar to Hong Kong, oil & gas, non-ferrous metals, and coal all rallied on the Mainland, along with banks, utilities, aerpospace, and steel. Defensive value stocks and sectors outperformed, at the expense of insurance, semiconductos, air travel, healthcare, consumer discretionary, and consumer staples. A press conference will be held Wednesday to answer reporter questions related to the agenda of the 14th National People’s Congress (NPC).
As frequent travelers to the region, KraneShares hopes all our friends and their families in the Middle East are safe and remain that way!
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -2.1% |
| Hang Seng Tech | HSTECH Index | -2.9% |
| Hong Kong Turnover | HKTurn Index | 24% |
| Hong Kong Short Sale Turnover | HKSST Index | 46.6% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 24.2% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 2,070.73 |
| China (Shanghai) | SHCOMP Index | 0.5% |
| China (Shenzhen) | SZCOMP Index | -0.7% |
| China (STAR Board) | Star50 Index | -1.6% |
| Mainland Turnover | .chturn Index | 21.4% |
| Japan | NKY Index | -1.3% |
| India | SENSEX Index | -1.3% |
| Indonesia | JCI Index | -2.7% |
| Malaysia | FBMKLCI Index | -1% |
| Pakistan | KSE100 Index | -9.8% |
| Philippines | PCOMP Index | -2.8% |
| South Korea | KOSPI Index | Closed |
| Taiwan | TWSE Index | -0.9% |
| Thailand | SET Index | -4% |
| Singapore | STI Index | -2.1% |
| Australia | AS51 Index | 0% |
| Vietnam | VNINDEX Index | -1.8% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 139 | 200 |
| Advancing Stocks | 98 | 1096 |
| Declining Stocks | 404 | 4000 |
| Outperforming Factors | Value | Momentum, Large Caps, Value |
| Underperforming Factors | Liquidity, EPS Revision, Growth | Liquidity, Quality, Growth |
| Top Sectors | Materials, Energy, Utilities | Energy, Materials, Utilities |
| Bottom Sectors | Tech, Healthcare, Discretionary | Communication, Healthcare, Real Estate |
| Top Subsectors | Petroleum, Non Ferrous Metal, Coal | Oil/Gas, Energy Equipment, Precious Metals |
| Bottom Subsectors | Semis, Consumer Staples Distribution, Consumer Discretionary Distribution | Cultural Media, Education, Internet |
| Southbound Connect Buys | HS Tech ETF, HK Tracker ETF (Very Large), CNOOC, Xiaomi (Large), Tencent (Moderate), Shandong Molong, YOFC (Small) | N/A |
| Southbound Connect Sells | Alibaba (Large), SMIC (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -1.94 |
| Communication Services | 11 | -1.23 |
| Consumer Discretionary | 28 | -3.1 |
| Consumer Staples | 13 | -3.01 |
| Energy | 6 | 2.75 |
| Financials | 25 | -2.36 |
| Health Care | 16 | -3.27 |
| Industrials | 22 | -1.33 |
| Information Technology | 12 | -4.16 |
| Materials | 14 | 3.02 |
| Real Estate | 7 | -1.5 |
| Utilities | 11 | 0.63 |
| Mainland China Listed | 386 | -0.05 |
| Communication Services | 8 | -3.42 |
| Consumer Discretionary | 26 | -0.3 |
| Consumer Staples | 19 | -1.44 |
| Energy | 12 | 6.83 |
| Financials | 64 | -0.6 |
| Health Care | 31 | -2.49 |
| Industrials | 58 | -0.05 |
| Information Technology | 95 | -1.05 |
| Materials | 52 | 2.74 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.8 |
| Alibaba HK | 9988 HK Equity | -4.5 |
| JD.com HK | 9618 HK Equity | -3 |
| NetEase HK | 9999 HK Equity | -1.1 |
| Yum China HK | 9987 HK Equity | -2.6 |
| Baozun HK | 9991 HK Equity | -7.1 |
| Baidu HK | 9888 HK Equity | -4.2 |
| Autohome HK | 2518 HK Equity | -2.9 |
| Bilibili HK | 9626 HK Equity | -3.4 |
| Trip.com HK | 9961 HK Equity | -1.8 |
| EDU HK | 9901 HK Equity | -2.6 |
| Xpeng HK | 9868 HK Equity | -1.6 |
| Weibo HK | 9898 HK Equity | -2.5 |
| Li Auto HK | 2015 HK Equity | -1.1 |
| Nio Auto HK | 9866 HK Equity | -2.5 |
| Zhihu HK | 2390 HK Equity | -3.3 |
| KE HK | 2423 HK Equity | -1.6 |
| Tencent Music Entertainment HK | 1698 HK Equity | -2 |
| Meituan HK | 3690 HK Equity | -4.6 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ALIBABA GROUP HOLDING LTD | -4.5 |
| TENCENT HOLDINGS LTD | -0.8 |
| CNOOC LTD-H | 5.6 |
| XIAOMI CORP-CLASS B | -5 |
| YANGTZE OPTICAL FIBRE AND-H | 11.6 |
| SEMICONDUCTOR MANUFACTURI-H | -5 |
| SHANDONG MOLONG PETROLEUM-H | 115.9 |
| BYD CO LTD-H | 4.4 |
| MEITUAN-CLASS B | -4.6 |
| HSBC HOLDINGS PLC | -5.2 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 6.9 |
| EOPTOLINK TECHNOLOGY INC L-A | 5.9 |
| SUZHOU TFC OPTICAL COMMUNI-A | -5.1 |
| ZIJIN MINING GROUP CO LTD-A | 3.1 |
| BEIJING TEAMSUN TECHNOLOGY-A | 3.6 |
| BYD CO LTD -A | 8.4 |
| CHINA NORTHERN RARE EARTH -A | -1.1 |
| TBEA CO LTD-A | 3.8 |
| CHINA SPACESAT CO LTD -A | 9.3 |
| VICTORY GIANT TECHNOLOGY -A | -0.2 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.90 versus 6.86 Friday
- CNY per EUR 8.07 versus 8.11 Friday
- Yield on 10-Year Government Bond 1.78% versus 1.78% Friday
- Yield on 10-Year China Development Bank Bond 1.94% versus
- Copper Price 0.71%
- Steel Price 0.43%
