Asian stocks mixed overnight as South Korea rebounded from yesterday’s 52-week low.
US-indexed Chinese ADRs and ETFs had a very smart day after the very forceful Politburo release, adding “proactive fiscal policy” and “accommodative financial policy. ” A key point is that the post took place after the 3:00 p. m. m. on the mainland, giving Hong Kong an hour to recover or go vertical. During US trading hours, Hong Kong futures followed US-indexed Chinese ADRs and ETFs higher, although interestingly, mainland China futures rose slightly. This gave rise to the hypothesis that the rise in US-China ADRs and the rise in China ETFs was due to a short-selling policy rather than the implementation of money. genuine. ” Hong Kong and Mainland China opened higher but fell throughout the trading day; the former, surprisingly in my opinion, ended the day and then made a small profit. Why this lack of overnight follow-through?
Scar tissue/skepticism: There have been several demonstrations in China that the general consensus/public would call “failed. “This is not true, because yes, there have been pullbacks, but the market continues to record highs and lows. A trading mindset, as opposed to an investment mindset, is characterized by the fact that quick profits are locked in again, indicating the skepticism/scar tissue theory.
Overnight in Hong Kong, Wuxi Biologics and Wuxi AppTec both fell -3.89% and -3.59% after yesterday’s rise of +9.57% and +9.62%.
Geopolitics: What do you think of China as Trade War 2. 0 looms? How do you get your investors, your board of directors, your managers or your investment committee to promote reasonable Chinese stocks when the discourse in the Western media is so negative? Ironically, investors are flocking to U. S. corporations with higher revenues in China, but as long as global investors continue to invest in U. S. inventories, they will rise. Although Chinese peak-expansion inventories have no exposure to US earnings, US-China ADRs continue to be based on US geopolitical and tariff headlines. That’s why we prefer to hold Hong Kong inventories rather than US ADRs. We are firmly in the art of the deal and oppose the Grapes of Wrath, meaning President Trump will negotiate a deal rather than enact the economic and tariff policies that led to the 1929 stock market crash and the Great Britain. Depression. Current insights into Chinese exports and imports show how integrated the two countries’ economies are.
Seasonality: A big factor is simply that investors have closed the books for 2024. Why rock the boat? Who knows that China has outperformed India, Japan, EM, and EM ex-China YTD? Who knows, China’s growth stocks have beaten the S&P 500 since their January bottom? Out of sight equals out of mind.
Do they have cheap words, even if they come from the highest point of government?It’s hard to say for sure, even if articulating a policy were more important than talking about it.
Today’s market action was disappointing, though the above factors indicate China’s rally will be a grind higher rather than a sprint, which isn’t a bad thing.
November’s industry insight likely dented sentiment as it fell short of expectations, with exports rising +6. 7% year-on-year (y-o-y), versus +8. 7% expected and +12. 7% in October. Imports fell -3. 9% compared to +0. 9% expected and -2. 3% in October. Trade data indicates a desire to increase domestic consumption despite an industrial war. Hang Seng and Hang Seng Tech opened up +3. 21% and +4. 24%, but closed down -0. 5% and -1. 39% due to higher volumes. Mainland investors sold $1. 327 billion worth of Hong Kong stocks and ETFs today, after buying $1. 543 billion worth yesterday.
The Shanghai, Shenzhen and STAR Board indices opened +2. 58%, +3. 35% and +4. 8%, but closed +0. 59%, +0. 87% and +0Array75%, respectively, with volumes superiors. It’s worth noting that mainland investors spotted the inclusion of input and real estate in the Politburo statement, with customer staples gaining +2. 2% and real estate +1. 44%. Tomorrow, the China Economic Work Conference opens with hopes of additional political support. The semi-annual rebalancing of the CSI index will take place on Friday, with record trading and sales expected due to the year-to-date (YTD) increase in mainland China ETF assets under management. President Xi and later Premier Li met in Beijing as part of the “1+10” dialogue, attended by leaders from the World Bank, the International Monetary Fund (IMF), the World Trade Organization (WTO), the Organization Labor International, the Economic Cooperation Organization. -Operations and Development (OECD) and Financial Stability Board. Premier Li said: “Increase countercyclical adjustments, intensity of macroeconomic policies, and make every effort to expand domestic demand and stimulate intake. ” We’ll end on a smart note.
Totally revealing: I’m not an Nvidia expert. I will simply reiterate the extensive mainland policy of the State Administration for Market Regulation (SARM) investigation into Nvidia for alleged violation of China’s antitrust law in connection with the company’s acquisition of Mellanox Technologies. Company. SARM approved the Nvidia acquisition in February 2020 with several stipulations, adding that it prohibited the combination of Nvidia GPU accelerators with Mellanox high-speed networking devices and did not require combining purchases. According to Sina Finance, Article 58 of the Antimonopoly Law states that a violation of the law includes an amount of 10% of last year’s sales and a maximum fine of between 2 billion and 5 billion dollars. Chinese media noted that the EU recently opened an antitrust investigation. Is this a retaliatory exchange for geopolitics between the United States and China? It is difficult to say with certainty because this type of investigation is carried out on foreign corporations. On the contrary, the SAMR investigation is absolutely contradictory to yesterday’s Politburo statement, which affirms China’s continued opening to foreign corporations. Within the big bureaucracy, one hand doesn’t know what the other is doing, which is why I’m less worried about Nvidia being a chess piece.
If you’re looking for an ebook gift for the holidays, I’ll give you two recommendations. Hampton Sides’ The Wide Wide Sea chronicles Captain Cook’s third and final voyage (spoiler alert) to Tahiti, Hawaii, and Alaska. I’m ashamed to admit how little I knew about Cook, although I found the e-book easy to read and educational. Sapiens by Yuval Noah Harari is a well-known e-book that is not the easiest to read but is worth it. I learned a lot from this eeebook, adding how long humans have been roaming the planet. Perhaps thanks to my summer reading of Peter Frankopan’s very clever e-book, The Silk Roads, which presents a history of the global from a Middle Eastern perspective, it occurred to me that Sapiens might come with Asia too. of its examination of European imperialism and the impact of the “Age of Discovery” on the peoples of South America and Africa. In my opinion, two smart eeebooks.
The Hang Seng and Hang Seng Tech fell -0. 5% and -1. 39% respectively, with volume up +19. 86% compared to yesterday, or 191% of the one-year average. 111 stocks rose, while 388 fell. Main Board short turnover increased 18% from yesterday, or 195% of the year-over-year average, as 16% of turnover was made up of short turnover (Hong Kong short turnover includes short volume of ETFs, which is We decided through market makers’ ETF coverage Value stocks and large-cap stocks fell less than growth stocks and small-cap stocks All sectors were negative, led. for the fall of Healthcare, -2. 89%, Real Estate -2. 54%, and Materials, -2. 15% The most sensitive subsectors were household/personal products, textiles and coal, while semiconductors, products volumes. pharmaceuticals, construction fabrics and trading conglomerates were the worst. -degrees of stimulus as mainland investors sold $1. 327 billion worth of Hong Kong stocks and ETFs, with Alibaba a net buy. moderate/small, Sunac a small net buy, Hong Kong Tracker ETF was a giant net sell, Tencent Array Meituan and CNOOC had moderate net sales, and Xiaomi had small net sales.
Shanghai, Shenzhen, and the STAR Board gained +0.59%, +0.87%, and +0.75%, respectively, on volume up +34% from yesterday, which is 220% of the 1-year average. 2,781 stocks advanced, while 2,331 declined. Growth and large capitalization stocks outperformed value and small capitalization stocks. The top sectors were consumer staples, up +2.18%, real estate, up +1.42%, and financials, up +1.38%, while utilities fell -0.69% and communication services fell -0.14%. The top sub-sectors were leisure products, retail, and chemical fiber industry, while highway, power, and comprehensive were the worst. Northbound Stock Connect volumes were almost 2X the average. CNY managed to gain a small amount while the Asia dollar index experienced a small loss compared to the US dollar. Treasury bonds rallied. Copper and steel rose.
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CNY consistent with $7. 25 to $7. 27 yesterday
CNY consistent with EUR 7. 64 7. 69 yesterday
The yield on 10-year government bonds was 1. 85% to 1. 92% yesterday
Chinese Development Bank 10-year bond yield was 1. 92% to 1. 99% yesterday
Copper valued at 0. 83%
Steel Price +2.98%
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