Trade Data Fuel Markets

Key News

Asian equities had a strong, resilient day despite President Trump’s tariff threats as the US dollar weakened overnight. Hong Kong and Mainland China fell during morning trading, though grinded higher with a value bias in both markets, though Hong Kong internet stocks had a positive day.

Strong July trade data helped lift markets with Exports +7.2% versus expectations of 5.6% and June’s 5.8% while Imports +4.1% versus expectations of -1% versus June’s 1.1%. Southeast Asia continues to be China’s largest export destination ($54B), followed by the EU ($50B) and then the US ($35B). So China isn’t collapsing despite US tariffs? Interesting.

With that said, Health Care fell -3.81% in Hong Kong and -0.53% in Mainland China. The sector was lower after President Trump’s threat of tariffs on pharmaceuticals. The Mainland-listed biotech giant Beigene fell -4.02%, the Hong Kong-listed Akeso fell -8.06%, and Wuxi AppTec fell -4.30%.

Apple’s ecosystem was higher after announcing a White House investment deal with Mainland-listed Foxconn, which gained +3.95%, Luxshare, which gained +2.24%, Hong Kong-listed Sunny Optical, which gained +3.30%, and AAC Technology, which gained +2.14%. Xiaomi fell -3.98%, making it Hong Kong’s most heavily traded stock by value, after a broker downgrade on mobile phone sales concerns. Alibaba gained +2.14% after announcing new AI models.

On the Mainland, mega-cap banks and oil helped keep market indices higher, which is why Shanghai (value stocks) outperformed Shenzhen (growth stocks).

Real estate was the top performer in Hong Kong, where it gained +2.07%, and Mainland China, where it gained +1.16%, following the Shanghai government’s announcement that the implementation of the Shanghai Urban Renewal Action Plan will begin in 2026, and run through 2028. I assume older housing projects will be torn down and replaced.

The distressed and overleveraged Hong Kong-listed New World Development gained +10.19% on chatter that the company is working on a $2.5B financing deal with Blackstone, though after the close, the company denied the rumor. Remember, due to the evisceration of overleveraged real estate developers during China’s housing downturn, only seven stocks in Hong Kong and six stocks in China qualify for MSCI indices, which is why we prefer to play housing company bonds versus the stocks. Additionally, the bonds, which are rated high yield, offer a near double-digit yield, in some cases, though I still can’t find any investors interested.

The Ministry of Industry and Information Technology (MIIT) and seven other government agencies, including the NDRC, announced "Implement Opinions on Promoting the Innovation and Development of Brain-Computer Interface Industry". I am pretty confident my wife believes I need a brain computer chip.

The Ministry of Finance commented on China’s demographics, stating that “population development” was a focus, and several supporting measures were implemented, such as the recent free preschool education benefiting 12 million people. S&P kept China’s sovereign credit rating at an “A” with a “stable” outlook.

The 2025 World Robot Conference kicks off in Beijing today through the 12th, followed by the “world’s first world humanoid robot games” also in Beijing, starting on August 14th. Huayan Robot is expected to announce a Hong Kong IPO to raise $200 million. Tesla’s Optimus humanoid robot is expected to enter China’s market later this year, with 1 million robots made within the next five years, according to a Mainland media source. This follows Unitree’s recent announcement, which is rumored to be heading to a Hong Kong listing, launching its R1 humanoid robot for CNY 39,900 ($5,558).

Last Night's Performance

Country / Index	Ticker	1-Day Change
China (Hong Kong)	HSI Index	0.7%
Hang Seng Tech	HSTECH Index	0.3%
Hong Kong Turnover	HKTurn Index	14.2%
Hong Kong Short Sale Turnover	HKSST Index	2.8%
Short Turnover as a % of Hong Kong Turnover	N/A	13.5%
Southbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	0
China (Shanghai)	SHCOMP Index	0.2%
China (Shenzhen)	SZCOMP Index	-0.1%
China (STAR Board)	Star50 Index	-0.1%
Mainland Turnover	.chturn Index	5.2%
Nouthbound Stock Connect Net Buy/Sell (US $ Millions)	N/A	Not Available
Jing Daily China Global Luxury Index	CHINALUX Index	0%
Japan	NKY Index	0.6%
India	SENSEX Index	0.1%
Indonesia	JCI Index	-0.2%
Malaysia	FBMKLCI Index	0.5%
Pakistan	KSE100 Index	0.6%
Philippines	PCOMP Index	-0.1%
South Korea	KOSPI Index	0.9%
Taiwan	TWSE Index	2.4%
Thailand	SET Index	0.1%
Singapore	STI Index	0.7%
Australia	AS51 Index	-0.1%
Vietnam	VNINDEX Index	0.5%

Indicator	Hong Kong	Mainland China
Today's Volume % of 1-Year Average	115	130
Advancing Stocks	346	1998
Declining Stocks	142	2899
Outperforming Factors	Value, Dividend Yield Low Volatility	Large Caps, Low Volatility, Value
Underperforming Factors	Momentum, EPS Revisions, Liquidity	Growth, Quality, Momentum
Top Sectors	Real Estate, Discretionary, Materials	Real Estate, Energy, Materials
Bottom Sectors	Healthcare, Tech, Communications	Healthcare, Discretionary
Top Subsectors	REITs, Discretionary, Chemical	Energy Equipment, Aviation, Leisure Products
Bottom Subsectors	Pharmaceuticals, National Defense, Electrical Equipment	Pharmaceutical, Biotech, Diversified Financial
Southbound Connect Buys	Xiaomi (Large), Alibaba, Innovent Bio, SMIC, Tencent (Small)
Southbound Connect Sells	HK Tracker ETF (Very Large), Pop Mart, Xtalpi (Small)

MSCI China All Shares Index	# of Stocks	Average 1-Day Change (%)
Hong Kong Listed	152	0.37
Communication Services	9	-0.18
Consumer Discretionary	28	1.4
Consumer Staples	13	1.24
Energy	6	0.84
Financials	24	1.29
Health Care	12	-3.81
Industrials	21	1.06
Information Technology	10	-2.66
Materials	10	1.4
Real Estate	7	2.07
Utilities	12	0.99
Mainland China Listed	395	0.25
Communication Services	7	0.28
Consumer Discretionary	29	-0.04
Consumer Staples	24	0.15
Energy	13	1.09
Financials	64	0.38
Health Care	32	-0.52
Industrials	61	0.18
Information Technology	90	0.15
Materials	54	0.71
Real Estate	6	1.15
Utilities	15	0.21

US & Hong Kong Dually Listed	Ticker	1-Day Change (%)
Tencent HK	700 HK Equity	-0.3
Alibaba HK	9988 HK Equity	2.1
JD.com HK	9618 HK Equity	1.7
NetEase HK	9999 HK Equity	-0.5
Yum China HK	9987 HK Equity	3.3
Baozun HK	9991 HK Equity	0.9
Baidu HK	9888 HK Equity	1.6
Autohome HK	2518 HK Equity	0.6
Bilibili HK	9626 HK Equity	-0.5
Trip.com HK	9961 HK Equity	2
EDU HK	9901 HK Equity	-0.2
Xpeng HK	9868 HK Equity	-0.5
Weibo HK	9898 HK Equity	1.6
Li Auto HK	2015 HK Equity	-0.9
Nio Auto HK	9866 HK Equity	-0.3
Zhihu HK	2390 HK Equity	0.6
KE HK	2423 HK Equity	0.2
Tencent Music Entertainment HK	1698 HK Equity	1.5
Meituan HK	3690 HK Equity	0.7

Hong Kong's Most Heavily Traded by Value	1-Day Change (%)
XIAOMI CORP-CLASS B	-0.6
TENCENT HOLDINGS LTD	-0.3
ALIBABA GROUP HOLDING LTD	2.1
POP MART INTERNATIONAL GROUP	7.9
SEMICONDUCTOR MANUFACTURI-H	3.1
BYD CO LTD-H	-0.4
MEITUAN-CLASS B	0.7
INNOVENT BIOLOGICS INC	-6.8
XTALPI HOLDINGS LTD	12.4
CSPC PHARMACEUTICAL GROUP LT	-3.8

Shanghai and Shenzhen's Most Heavily Traded by Value	1-Day Change (%)
CHINA NORTHERN RARE EARTH -A	0.4
CHINA CSSC HOLDINGS LTD-A	10
ZHONGJI INNOLIGHT CO LTD-A	-0.2
FOXCONN INDUSTRIAL INTERNE-A	-2.1
CAMBRICON TECHNOLOGIES-A	1.2
EOPTOLINK TECHNOLOGY INC L-A	2.2
SHENGHE RESOURCES HOLDINGS-A	7.4
VICTORY GIANT TECHNOLOGY -A	4.3
LUXSHARE PRECISION INDUSTR-A	2.2
ANHUI GREAT WALL MILITARY -A	10

Last Night’s Exchange Rates, Prices, & Yields

• CNY per USD 7.17 versus 7.18 yesterday
• CNY per EUR 8.37 versus 8.33 yesterday
• Yield on 10-Year Government Bond 1.69% versus 1.70% yesterday
• Yield on 10-Year China Development Bank Bond 1.78% versus 1.79% yesterday
• Copper Price +0.28%
• Steel Price +0.19%