All Quiet On The Western Front

Key News

Asian equities were mixed overnight on LIGHT volumes and little news. The Hang Seng gained +0.11% on volume +9.88% from yesterday though that is only 41% of the 1-year average. Hong Kong internet stocks were mixed despite the positive news on Didi’s Hong Kong convertibility and Alibaba exploring selling off its Weibo stake. Didi’s latest financial results were a disappointment as costs increased and revenues were off year over year and quarter over quarter.

Hong Kong brokers noted comments from a former PBOC official recommending more economic support for the economy and yesterday’s news on tax breaks for individuals.

AI firm SenseTime’s IPO jumped +7.27% though US investors are banned from investing in the company.

Today was not dissimilar to the trend of Hong Kong (foreign investors definition of China) underperforming Mainland China (Chinese investors’ definition of China) as Hong Kong hasn’t been able to shake its year-long funk. Healthcare had a good day in Hong Kong +1.34% as Xi’an battles a coronavirus outbreak while materials were off on lithium profit-taking.

The Mainland had a better day with Shanghai +0.62%, Shenzhen +0.91%, and STAR Board +1.43% as volume increased 2% from yesterday, which is 97% of the 1-year average. Growth names and sectors outperformed value stocks and sectors as semiconductors had a strong day. Foreign investors were large buyers of Mainland stocks to the tune of $1.277B of net purchases.

Chinese Treasury bonds had a good day while the currency was basically flat versus the US $ and copper was off.

Last Night’s Exchange Rates, Prices, & Yields

• CNY/USD 6.37 versus 6.37 yesterday
• CNY/EUR 7.22 versus 7.20 yesterday
• Yield on 10-Year Government Bond 2.77% versus 2.79% yesterday
• Yield on 10-Year China Development Bank Bond 3.07% versus 3.07% yesterday
• Copper Price -0.31% overnight