China ETF News: Trump Delays China Trip, Tencent Reports Earnings Tomorrow
By Henry Greene
Key News
Asian equities were mostly higher overnight as Thailand and Korea outperformed, while Mainland China and Japan underperformed.
There was a slight value bias and defensive bias overnight in both Mainland China and Hong Kong, as semiconductor names were mostly lower. Hong Kong outpaced Mainland China as the Hang Seng Index managed a gain, while Mainland indexes were mostly lower on slightly elevated volumes. Mainland investors were significant net sellers of Hong Kong-listed stocks and ETFs, selling about -$1.5 billion, though they were net buyers of Tencent, which reports earnings tomorrow, and Xiaomi.
Trump has requested a one-month delay to his trip to China to meet with President Xi. This is not the best news, but it makes sense given the current conflict. Remember that trade delegates had a very positive meeting in Paris over the weekend. Perfection takes time! China's potential help with Strait of Hormuz re-opening may also be a positive for the relationship, though China usually prefers to remain on the sidelines of any conflict.
Over 70% of Mainland-listed corporations have reported earnings. Meanwhile, we are still waiting on earnings for some Hong Kong-listed large cap internet names. The lack of information has definitely weighed on the offshore market, in our opinion. Fortunately, we will hear from Tencent tomorrow and from Alibaba on Thursday. In speaking with Alibaba's management, they implied that the focus of the call this week will be on the further development of Alibaba's "full stack" AI ecosystem, with some internal consolidation and re-organization expected. We note that the conglomerate has just about every AI value generator one could think of.
Real estate outperformed in Hong Kong overnight. This could have been driven by a positive signal in China's consumer sentiment, as seen in yesterday's economic data dump. However, housing sales are still low.
China implemented new rules for Mainland-based corporations seeking to list in Hong Kong. This triggered a slew of companies seeking to amend their corporate structures to comply with the new rules, indicating a strong interest in listing on the exchange this year.
Last Night's Performance
| Country / Index | Ticker | 1-Day Change |
|---|---|---|
| China (Hong Kong) | HSI Index | 0.1% |
| Hang Seng Tech | HSTECH Index | -0.1% |
| Hong Kong Turnover | HKTurn Index | 1.4% |
| Hong Kong Short Sale Turnover | HKSST Index | -27.4% |
| Short Turnover as a % of Hong Kong Turnover | N/A | 13.6% |
| Southbound Stock Connect Net Buy/Sell (US $ Millions) | N/A | -1,466.24 |
| China (Shanghai) | SHCOMP Index | -0.9% |
| China (Shenzhen) | SZCOMP Index | -1.9% |
| China (STAR Board) | Star50 Index | -2.2% |
| Mainland Turnover | .chturn Index | -5.4% |
| Japan | NKY Index | -0.1% |
| India | SENSEX Index | 0.8% |
| Indonesia | JCI Index | 1.2% |
| Malaysia | FBMKLCI Index | 0.9% |
| Pakistan | KSE100 Index | 0.6% |
| Philippines | PCOMP Index | 0.3% |
| South Korea | KOSPI Index | 1.6% |
| Taiwan | TWSE Index | 1.5% |
| Thailand | SET Index | 2.1% |
| Singapore | STI Index | 1.4% |
| Australia | AS51 Index | 0.4% |
| Vietnam | VNINDEX Index | 1% |
| Indicator | Hong Kong | Mainland China |
|---|---|---|
| Today's Volume % of 1-Year Average | 105 | 121 |
| Advancing Stocks | 58 (Hang Seng) | 104 (CSI 300) |
| Declining Stocks | 30 (Hang Seng) | 190 (CSI 300) |
| Outperforming Factors | Value | Value |
| Underperforming Factors | Growth | Growth |
| Top Sectors | Real Estate, Financials, Consumer Discretionary | Financials, Consumer Staples, Health Care |
| Bottom Sectors | Communication Services, Information Technology, Energy | Information Technology, Materials, Industrials |
| Top Subsectors | Consumer Durables, Household & Personal, Aerospace | Insurance, Chemical Fiber, Securities Brokerage |
| Bottom Subsectors | Semiconductors, Electrical Equipment, Chemical Industry | Communication Equipment, Power Generation, Fine Chemicals |
| Southbound Connect Buys | Bright Smart, Xiaomi, Alibaba | N/A |
| Southbound Connect Sells | YOFC, Tencent, Semiconductor Manufacturing International (SMIC) | N/A |
| MSCI China All Shares Index | # of Stocks | Average 1-Day Change (%) |
|---|---|---|
| Hong Kong Listed | 165 | -0.1 |
| Communication Services | 11 | -1.43 |
| Consumer Discretionary | 28 | 0.78 |
| Consumer Staples | 13 | 0.24 |
| Energy | 6 | -1.02 |
| Financials | 25 | 0.98 |
| Health Care | 16 | 0.36 |
| Industrials | 22 | -0.59 |
| Information Technology | 12 | -1.09 |
| Materials | 14 | -0.84 |
| Real Estate | 7 | 1.29 |
| Utilities | 11 | -0.98 |
| Mainland China Listed | 386 | -0.73 |
| Communication Services | 8 | -0.02 |
| Consumer Discretionary | 26 | -0.33 |
| Consumer Staples | 19 | 0.99 |
| Energy | 12 | -1.34 |
| Financials | 64 | 1.44 |
| Health Care | 31 | 0.88 |
| Industrials | 58 | -1.39 |
| Information Technology | 95 | -2.69 |
| Materials | 52 | -1.52 |
| US & Hong Kong Dually Listed | Ticker | 1-Day Change (%) |
|---|---|---|
| Tencent HK | 700 HK Equity | -1.5 |
| Alibaba HK | 9988 HK Equity | 0.4 |
| JD.com HK | 9618 HK Equity | 0.5 |
| NetEase HK | 9999 HK Equity | -0.1 |
| Yum China HK | 9987 HK Equity | 2 |
| Baozun HK | 9991 HK Equity | -3.1 |
| Baidu HK | 9888 HK Equity | -3 |
| Autohome HK | 2518 HK Equity | -1.3 |
| Bilibili HK | 9626 HK Equity | 1 |
| Trip.com HK | 9961 HK Equity | 0 |
| EDU HK | 9901 HK Equity | 0.6 |
| Xpeng HK | 9868 HK Equity | -0.1 |
| Weibo HK | 9898 HK Equity | -1.2 |
| Li Auto HK | 2015 HK Equity | 2 |
| Nio Auto HK | 9866 HK Equity | 0.6 |
| Zhihu HK | 2390 HK Equity | 0.7 |
| KE HK | 2423 HK Equity | -1.8 |
| Tencent Music Entertainment HK | 1698 HK Equity | 0.6 |
| Meituan HK | 3690 HK Equity | 2.2 |
| Hong Kong's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| TENCENT HOLDINGS LTD | -1.5 |
| ALIBABA GROUP HOLDING LTD | 0.4 |
| BRIGHT SMART SECURITIES AND | 46.7 |
| XIAOMI CORP-CLASS B | 0.5 |
| CNOOC LTD-H | -2.2 |
| BYD CO LTD-H | 0.2 |
| MEITUAN-CLASS B | 2.2 |
| YANGTZE OPTICAL FIBRE AND-H | -12.4 |
| SHANDONG MOLONG PETROLEUM-H | -1.5 |
| SEMICONDUCTOR MANUFACTURI-H | -1 |
| Shanghai and Shenzhen's Most Heavily Traded by Value | 1-Day Change (%) |
|---|---|
| EOPTOLINK TECHNOLOGY INC L-A | -5.8 |
| ZHONGJI INNOLIGHT CO LTD-A | -3.3 |
| WUS PRINTED CIRCUIT KUNSHA-A | 2 |
| SUZHOU TFC OPTICAL COMMUNI-A | -10 |
| CONTEMPORARY AMPEREX TECHN-A | -0.8 |
| VICTORY GIANT TECHNOLOGY -A | -3.1 |
| HGTECH CO LTD-A | -5.2 |
| SUNGROW POWER SUPPLY CO LT-A | -3.8 |
| GIGADEVICE SEMICONDUCTO-CL A | -3.3 |
| SUZHOU DONGSHAN PRECISION-A | -7.8 |
Last Night's Exchange Rates, Prices, & Yields
- CNY per USD 6.88 versus 6.89 yesterday
- CNY per EUR 7.94 versus 7.94 yesterday
- Yield on 10-Year Government Bond 1.83% versus 1.83% yesterday
- Yield on 10-Year China Development Bank Bond 1.98% versus 1.98% yesterday
- Copper Price -0.56%
- Steel price 0.51%
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