Z.AI Zooms On MSCI Inclusion
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Key News
Asian equities were mixed, as investors ponder ongoing Middle East tensions and Warsh’s hawkish comments, on higher volumes due to MSCI’s index rebalance today, with Malaysia closed for National Day, the Philippines for National Heroes Day, and Vietnam for Independence Day.
Hong Kong’s high volumes, at 115% of the 1-year average, were driven by MSCI’s index rebalancing, as Hong Kong is the primary definition of China. Mainland China, which has minimal exposure in MSCI indices, had volume at only 86% of the 1-year average.
MSCI's addition of AI LLM company Z.AI (+9.63%) led to the stock being Hong Kong’s most heavily traded by value, though after the close, its 1st half financial results missed on revenue expectations despite growth of +399% year-over-year (YoY), while adjusted net income and adjusted EPS beat analyst expectations. AI LLM peer MiniMax gained +16.18% after Rehan Sheikh used the company’s H3 Max to livestream for 24 hours on Twitch.
It was fairly quiet as both Hong Kong and Mainland China opened lower but grinded higher throughout the day, with the former posting a small loss and the latter closing in the green. Both markets saw the banking sector outperform, while non-ferrous metals underperformed. Real Estate was the worst sector in both Hong Kong and Mainland China, as profit-taking ruled the day. Hong Kong internet stocks outperformed as Alibaba gained +0.26%, Tencent fell -0.48%, Baidu gained +0.47%, NetEase gained +0.1%, Meituan gained +1.81%, JD.com gained +1.54%, and Trip.com gained +2.98%. Mainland-listed AI sub-sectors were largely higher, led by semiconductor, semiconductor equipment, and tech hardware’s electronic equipment stocks, though communications equipment was mixed.
CXMT fell by -1.01% after posting strong financial results after Friday’s close. Innolight fell by -0.75%, though after the close, it announced an RMB 8 billion buyback. Healthcare stocks were lower in both markets.
August’s “official” Manufacturing PMI, as the survey is conducted by the National Bureau of Statistics, was 49.8 from July’s 49.2, versus expectations of 49.5, with new orders and the production index improving over 50 (expansion) month over month. The Non-Manufacturing PMI was 49 from July’s 49, versus expectations of 49.4, with input prices increasing month-over-month (MoM).
The Ministry of Commerce and six other government agencies released “the implementation opinions on promoting the expansion and upgrading of commodity consumption,” which focuses on improving domestic demand for autos, home appliances, communication equipment, and clothing, while setting a target of RMB 60 trillion in retail sales by 2030. It is interesting that there was not much of a market reaction, similar to the PMIs.
President Xi had a busy day at the Shanghai Cooperation Organization in Kyrgyzstan, meeting with President Putin, Mongolia’s President Ukhnaa Khurelsukh, and Kyrgyzstan’s President Sadyr Japarov.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | -0.1% |
| Hang Seng Tech | HSTECH Index | 0.3% |
| Hong Kong Turnover | HKTurn Index | 36.2% |
| Hong Kong Short Sale Turnover | HKSST Index | 10.5% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 0.2 |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | 273.21 |
| China (Shanghai) | SHCOMP Index | 0.9% |
| China (Shenzhen) | SZCOMP Index | 0.6% |
| China (STAR Board) | Star50 Index | 1.3% |
| Mainland Turnover | .chturn Index | 1.1% |
| Japan | NKY Index | -0.1% |
| India | SENSEX Index | -0.4% |
| Indonesia | JCI Index | 0.1% |
| Malaysia | FBMKLCI Index | -0.9% |
| Pakistan | KSE100 Index | -0.4% |
| Philippines | PCOMP Index | -0.8% |
| South Korea | KOSPI Index | 0.5% |
| Taiwan | TWSE Index | -0.4% |
| Thailand | SET Index | 0.4% |
| Singapore | STI Index | 1% |
| Australia | AS51 Index | -0.2% |
| Vietnam | VNINDEX Index | -0.0005 |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 115% | 86% |
| Advancing Stocks | 160 | 2787 |
| Declining Stocks | 365 | 2234 |
| Outperforming Factors | None | Liquidity, Momentum, Low Volatility |
| Underperforming Factors | Quality, Growth, Buyback | Buybacks |
| Top Sectors | Financials, Utilities, Energy | Communication, Tech, Energy |
| Bottom Sectors | Real Estate, Materials, Healthcare | Real Estate, Healthcare, Discretionary |
| Top Subsectors | Banks, Media/Entertainment, Household Appliances | Cultural Media, Computer Hardware, Education |
| Bottom Subsectors | Real Estate Management/Development, Non Ferrous Metal, Construction Materials | Precious Metal, Auto, Aviation |
| Southbound Connect Buys | KB Laminates, Tencent (Moderate) | N/A |
| Southbound Connect Sells | Meituan, MiniMax (Moderate), Z AI (Small) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -0.11 |
| Communication Services | 11 | -0.36 |
| Consumer Discretionary | 28 | -0.15 |
| Consumer Staples | 13 | -1.72 |
| Energy | 6 | 0.61 |
| Financials | 25 | 2.82 |
| Health Care | 16 | -3.7 |
| Industrials | 22 | -0.87 |
| Information Technology | 12 | 0.04 |
| Materials | 14 | -3.87 |
| Real Estate | 7 | -6.7 |
| Utilities | 11 | 0.75 |
| Mainland China Listed | 386 | 0.56 |
| Communication Services | 8 | 3.25 |
| Consumer Discretionary | 26 | -0.87 |
| Consumer Staples | 19 | -0.18 |
| Energy | 12 | 1.5 |
| Financials | 64 | 1.24 |
| Health Care | 31 | -1.3 |
| Industrials | 58 | -0.74 |
| Information Technology | 95 | 1.74 |
| Materials | 52 | -0.71 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -0.5 |
| Alibaba HK | 9988 HK Equity | 0.3 |
| JD.com HK | 9618 HK Equity | 1.5 |
| NetEase HK | 9999 HK Equity | 0.1 |
| Yum China HK | 9987 HK Equity | 0.1 |
| Baozun HK | 9991 HK Equity | -0.1 |
| Baidu HK | 9888 HK Equity | 0.5 |
| Autohome HK | 2518 HK Equity | -0.1 |
| Bilibili HK | 9626 HK Equity | -2 |
| Trip.com HK | 9961 HK Equity | 3 |
| EDU HK | 9901 HK Equity | -0.3 |
| Xpeng HK | 9868 HK Equity | 0.2 |
| Weibo HK | 9898 HK Equity | -2.2 |
| Li Auto HK | 2015 HK Equity | -0.3 |
| Nio Auto HK | 9866 HK Equity | -2.4 |
| Zhihu HK | 2390 HK Equity | -3.9 |
| KE HK | 2423 HK Equity | -2.2 |
| Tencent Music Entertainment HK | 1698 HK Equity | -1.2 |
| Meituan HK | 3690 HK Equity | 1.8 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| Z AI CO LTD | 9.6 |
| ALIBABA GROUP HOLDING LTD | 0.3 |
| TENCENT HOLDINGS LTD | -0.5 |
| MINIMAX GROUP INC | 16.2 |
| MEITUAN-CLASS B | 1.8 |
| CHINA CONSTRUCTION BANK-H | 3.9 |
| KINGBOARD LAMINATES HLDG LTD | 2.7 |
| PING AN INSURANCE GROUP CO-H | -0.6 |
| KINGBOARD HOLDINGS LTD | 2.8 |
| BANK OF CHINA LTD-H | 5.7 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| CXMT CORP-A | -1 |
| ZHONGJI INNOLIGHT CO LTD-A | -0.8 |
| SHENGYI TECHNOLOGY CO LTD -A | 5.3 |
| CAMBRICON TECHNOLOGIES-A | 6.3 |
| HENGTONG OPTIC-ELECTRIC CO-A | -1.9 |
| GIGADEVICE SEMICONDUCTO-CL A | 2.3 |
| EOPTOLINK TECHNOLOGY INC L-A | 0.7 |
| SUNGROW POWER SUPPLY CO LT-A | -6.3 |
| UNISPLENDOUR CORP LTD-A | 8.5 |
| ZIJIN MINING GROUP CO LTD-A | -2.8 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.72 versus 6.72 Friday
- CNY per EUR 7.79 versus 7.82 Friday
- Yield on 10-Year Government Bond 1.69% versus 1.69% Friday
- Yield on 10-Year China Development Bank Bond 1.77% versus 1.77% Friday
- Copper Price +0.06%
- Steel Price +0.84%
