Asian stocks ended a smart week on a high note thanks to Japan’s excellent performance.
Hong Kong had a bright day, dominated by stocks and expansion sectors, with the top of the price-traded stocks being Alibaba, which gained 4. 84% to the US board’s 0. 09% after combined financial effects and before the likely conversion of its Hong Kong board to the double number one with the United States. Tencent, which gained 1. 14% to 0. 59% for its American board and having bought 2. 7 million shares overnight, Meituan, which gained 5. 18%, and JD. com, which gained 8. 91% compared to a gain of just 4. 25% for its board in United States, relied on larger-than-expected quarterly effects. Faced with the same news, Asian investors were twice as enthusiastic. The only component of MSCI China that is fundamentally improving is Internet stocks.
This morning at 8 o’clock, a member of Premier Li Qiang’s State Council expressed the desire to “develop domestic demand well, focus on stimulating consumption, and take specific measures to smooth the business cycle. “in spaces of high growth and driving force to advertise consumption, promote expansion and the quality of consumption of services, advertise mass consumption well”.
Yesterday’s talks by the president of the People’s Bank of China on economic policy aid also helped Hong Kong. This was followed today by a Reuters report on the government issuing vouchers to stimulate tepid domestic consumption, which has attracted much attention in Asia. The well-written article, which I will post on Twitter (@ahern_brendan), notes that three Chinese economists wrote in China Daily that the government deserves to factor $139 billion in customer vouchers, which would increase the budget deficit by 3%. at 4%. Real estate costs fell between -20% and -30%. The article notes that the third plenary statement “promised a slow shift toward customer recovery, in what analysts saw as an official admission that the previous toolset was not working as expected. ” It is one hundred percent true that the economic scenario is identified at the highest level of government!
Coincidentally, CCTV News reiterated that the subsidy for the purchase of a new electric vehicle (EV) has been increased from 10,000 to 20,000 RMB and from 7,000 to 15,000 RMB for a new gasoline vehicle. Do these “subtle signals” indicate the arrival of policies for domestic consumption?
Markets also benefited from net purchases worth $606 million from mainland investors through Southbound Stock Connect, adding the Hong Kong Tracker ETF, the Hang Seng Tech ETF and Tencent beneficiaries. The mainland market continues to demonstrate why the government wants to step up its policy, as stocks fell broadly while the Treasury bond market recovered. The national team gave the impression to the market based on the recovery of their favorite ETFs expired on the day.
Today’s China Daily included an interview with Zhang Ming, deputy director of the Institute of Finance and Banking of the Chinese Academy of Social Sciences, saying, “Gradually expanding the proportion by which the provincial-level social security budget can invest in A-shares is a feasible solution. where the central bank buys ETFs directly. ” Go ahead!
It’s hard to forget about several high-profile hedge fund managers who bought Chinese stocks and ETFs last quarter, based on quarterly 13F forms filed with the SEC. This in the context of sales of Chinese indexed ETFs in the United States. In fact, two of the four largest ETFs saw their inventories drop -38% and -40%, respectively. Oh! At the same time, MSCI Emerging Markets will rebalance China to 24% and India to 20%. Thus, a country with a GDP of 3. 5 trillion dollars has almost the same weight as a country with a GDP of 18 trillion dollars. In fact, Taiwan’s GDP is less than $1 trillion, despite a weighting of 18. 45%. MSCI Taiwan has a market capitalization of $1. 39 trillion, and Taiwan Semiconductor Manufacturing Co. (TSMC) makes up 50% of the index, just as ASML makes up 43% of the MSCI Netherlands index. Having been involved in the world of indexing, a very high concentration of a stock or sector in an index can be a sign of a spike for that stock. Nortel Networks became 50% owned by MSCI Canada in 1999, just before its transfer.
The Hang Seng and Hang Seng Tech indices gained +1. 88% and +2. 21% respectively, with volume increasing +15. 32% compared to yesterday, or 99% of the one-year average. 316 stocks rose while 142 fell. Main Board’s short turnover increased +24% from yesterday, representing 113% of the year-over-year average, with 20% of turnover being short turnover (Hong Kong short turnover includes the short volume of ETF, which we decide through the market). manufacturers ETF coverage). Large-cap and growth stocks outperformed small-cap and price stocks. The most productive sectors were Consumer Discretionary, which gained +4. 22%, Health, which gained +1. 84%, and Materials, which gained +1. 72%. For its part, Public Services fell -0. 62%, Real Estate fell -0. 50% and Technology fell -0. 08%. The most productive subsectors were retail, prescription drugs, and consumer durables. At the same time, the food, beverage and media sectors were among the worst performers. Southbound Stock Connect volumes were moderate as mainland investors bought a net $606 million worth of Hong Kong-listed stocks and ETFs, with the Hong Kong Tracker ETF accounting for significant net buying, and the Hang Seng Tech ETF, which was a moderate net buy. buy. Array and Tencent, which was a small net purchase. Meanwhile, Meituan and China Construction Bank made small net purchases.
Shanghai, Shenzhen and the STAR Board had mixed results, ending with a James Bond of +0. 07%, -0. 30% and -0. 33%, respectively, on volume that increased +0. 07% through yesterday , or 74% of the one-year average. . A total of 1,696 stocks rose while 3,238 fell. Large-cap and value stocks outperformed small-cap and growth stocks. The most productive sectors were energy, which gained +0. 87%, financials, which gained +0. 60%, and discretionary clients, which gained +0. 59%. Meanwhile, public services fell -0. 76%, real estate -0. 66% and industrial -0. 42%. The most productive subsectors were maritime transport, telecommunications and banking. Meanwhile, motorcycles, agriculture and the forestry industry were among the worst performers. Northbound Stock Connect volumes were moderate as foreign investors promoted with Agriculture Bank small net buying, China Unicom and Sokon were moderate/small net buying, while BYD, CATL and Midea were small net selling. Treasury bonds have rallied. The CNY and the Asian dollar index recovered. Copper gained while the metal fell.
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