Stocks Rebound Broadly, Week in Review
5 Min. Read Time
Week in Review
- Asian equities were mixed but mostly lower for the week as Indonesia, India, and Australia underperformed, while Hong Kong, Vietnam, and Mainland China underperformed.
- China reported May trade data that exceeded expectations on Tuesday, as chip exports more than doubled from last year.
- The AI “picks and shovels” trade came under pressure this week, as Mainland-listed semiconductor and technology hardware stocks that have outperformed this year were sold off.
- Tencent benefited from the further integration of AI tools into its WeChat super-app and strong buybacks.
Friday’s Key News
Asian equities were mostly higher overnight on hopes of an Iran deal, as Korea and Japan outperformed, while the Philippines and Vietnam underperformed.
China’s markets enjoyed a generally positive overnight session, despite mixed signals from broader economic data and global commodity markets. Non-ferrous metals and battery names were strong performers, though there was a slight value tilt in both Hong Kong and Mainland China. Meanwhile, leading chipmakers Semiconductor Manufacturing International (SMIC) and Biren Technology experienced declines overnight.
The heightened turnover in Shanghai, Shenzhen, and Hong Kong indicated renewed investor interest as global crude oil prices declined sharply after the US announced that a final agreement with Iran was close at hand. However, Mainland investors sold a net $500 million worth of Hong Kong-listed stocks and ETFs, likely taking profits on market strength.
Tencent repurchased HKD 500 million worth of shares overnight. The company has recently stepped up its stock buybacks to reignite investor interest in its battered shares. The company’s AI efforts are increasingly recognized by global investors as AI tools are rolled out across the massive WeChat ecosystem, which boasts over one billion users worldwide.
Optical communications equipment maker and recent star performer Eoptolink announced plans to relist its shares in Hong Kong, a solid move, though its Mainland listing will likely continue to command a higher premium. We are likely to continue to hold the Mainland listing.
Meituan fell -0.3% and Trip.com gained +3.00%, despite China’s market regulators summoning 7 firms, including both Trip and Meituan, over reducing the amount of fraudulent advertisements for travel and train tickets on their platforms.
Alibaba is trying to buy a grocery delivery firm, bidding $1.5 billion and raising concerns about a return to zero-sum competition in the instant commerce and food delivery industries. However, we believe that the competition has been firmly reduced and expect to see continued improvement in companies’ bottom lines in their second-quarter reports. Alibaba also replaced the head of its DingTalk remote work software platform. Alibaba gained +3% overnight.
Pop Mart gained +3% overnight. The company’s flagship toy, the “Labubu”, has appeared in multiple World Cup promotions.
Financials outperformed in Hong Kong. HSBC gained +3.10%.
Last Night’s Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 1.9% |
| Hang Seng Tech | HSTECH Index | 1.1% |
| Hong Kong Turnover | HKTurn Index | 9.7% |
| Hong Kong Short Sale Turnover | HKSST Index | -6.2% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 16.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -503.49 |
| China (Shanghai) | SHCOMP Index | 1.1% |
| China (Shenzhen) | SZCOMP Index | 1% |
| China (STAR Board) | Star50 Index | 0% |
| Mainland Turnover | .chturn Index | 26.1% |
| Japan | NKY Index | 2.8% |
| India | SENSEX Index | 2.3% |
| Indonesia | JCI Index | 2.1% |
| Malaysia | FBMKLCI Index | 0.2% |
| Pakistan | KSE100 Index | 1.7% |
| Philippines | PCOMP Index | -0.5% |
| South Korea | KOSPI Index | 4.6% |
| Taiwan | TWSE Index | 2.4% |
| Thailand | SET Index | 1.3% |
| Singapore | STI Index | 0.8% |
| Australia | AS51 Index | 2% |
| Vietnam | VNINDEX Index | -0.4% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 119 | 142 |
| Advancing Stocks | 82 (Hang Seng) | 232 (CSI 300) |
| Declining Stocks | 11 (Hang Seng) | 63 (CSI 300) |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Materials, Health Care, Financials | Materials, Financials, Health Care |
| Bottom Sectors | Information Technology, Utilities, Communication Services | Information Technology, Communication Services, Consumer Staples |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | 2.19 |
| Communication Services | 11 | 1.38 |
| Consumer Discretionary | 28 | 2.24 |
| Consumer Staples | 13 | 1.56 |
| Energy | 6 | 1.45 |
| Financials | 25 | 3.1 |
| Health Care | 16 | 3.53 |
| Industrials | 22 | 2.22 |
| Information Technology | 12 | -0.01 |
| Materials | 14 | 6.15 |
| Real Estate | 7 | 1.9 |
| Utilities | 11 | 0.84 |
| Mainland China Listed | 386 | 1.4 |
| Communication Services | 8 | 0.54 |
| Consumer Discretionary | 26 | 0.9 |
| Consumer Staples | 19 | 0.9 |
| Energy | 12 | 0.98 |
| Financials | 64 | 2.51 |
| Health Care | 31 | 2.29 |
| Industrials | 58 | 1.86 |
| Information Technology | 95 | -0.26 |
| Materials | 52 | 4.18 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | 1.4 |
| Alibaba HK | 9988 HK Equity | 2.6 |
| JD.com HK | 9618 HK Equity | 3.4 |
| NetEase HK | 9999 HK Equity | 0.9 |
| Yum China HK | 9987 HK Equity | 1.1 |
| Baozun HK | 9991 HK Equity | 1.3 |
| Baidu HK | 9888 HK Equity | 2.2 |
| Autohome HK | 2518 HK Equity | 3.2 |
| Bilibili HK | 9626 HK Equity | 1.2 |
| Trip.com HK | 9961 HK Equity | 0.8 |
| EDU HK | 9901 HK Equity | 3.4 |
| Xpeng HK | 9868 HK Equity | 2.7 |
| Weibo HK | 9898 HK Equity | 0 |
| Li Auto HK | 2015 HK Equity | 7.2 |
| Nio Auto HK | 9866 HK Equity | 0.8 |
| Zhihu HK | 2390 HK Equity | 0.2 |
| KE HK | 2423 HK Equity | 4.5 |
| Tencent Music Entertainment HK | 1698 HK Equity | 2 |
| Meituan HK | 3690 HK Equity | -0.3 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | 1.4 |
| ALIBABA GROUP HOLDING LTD | 2.6 |
| SEMICONDUCTOR MANUFACTURI-H | -2.3 |
| YANGTZE OPTICAL FIBRE AND-H | -1.7 |
| KINGBOARD LAMINATES HLDG LTD | -2.4 |
| HUA HONG GRACE SEMICONDUCTOR | -0.1 |
| LENOVO GROUP LTD | -2.4 |
| POP MART INTERNATIONAL GROUP | 2.6 |
| KINGBOARD HOLDINGS LTD | -4.7 |
| AIA GROUP LTD | 1.1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| ZHONGJI INNOLIGHT CO LTD-A | 2.2 |
| EOPTOLINK TECHNOLOGY INC L-A | -3.7 |
| HENGTONG OPTIC-ELECTRIC CO-A | -5.3 |
| GIGADEVICE SEMICONDUCTO-CL A | -0.4 |
| BIWIN STORAGE TECHNOLOGY C-A | 1.1 |
| CAMBRICON TECHNOLOGIES-A | 1.7 |
| SUZHOU DONGSHAN PRECISION-A | 3.1 |
| BOE TECHNOLOGY GROUP CO LT-A | -4.5 |
| JIANGSU ZHONGTIAN TECHNOLO-A | -1.4 |
| CONTEMPORARY AMPEREX TECHN-A | 3.3 |
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 6.76 versus 6.77 yesterday
- CNY per EUR 7.83 versus 7.83 yesterday
- Yield on 10-Year Government Bond 1.74% versus 1.75% yesterday
- Yield on 10-Year China Development Bank Bond 1.82% versus 1.82% yesterday
- Copper Price 1.21%
- Steel Price 0.41%
