One step forward and one step back


New Keys

Asian stocks were mixed following the decline in US stocks and growing fears of the Delta variant’s contagion with Australia heading towards a lockdown.

We took a step forward because Tencent’s social media platform WeChat was cleared to accept new users following a review of user data security. We then took a step back when a mainland media source pointed out that online game companies should not benefit from reduced tax rates, bringing down Tencent and NetEase. Mainland investors were net sellers of Tencent but not in significant size through Southbound Stock Connect, after yesterday’s first day of net buying in two weeks.

A mainland media source noted that “the Chinese stock market has experienced some volatility recently, in part due to a degree of market concern with recent regulatory policies for the platform economy and the platform industry. tutoring ”. The article noted that this reaction “misinterprets regulatory measures …” and instead emphasized long-term development goals as well as the importance of protecting user data and privacy.

We also had an article in the mainland media noting the issue of vaping among children and the dangers of alcohol, which brought down related stocks including liquor giant Kweichow Moutai. Hopefully the source of the current market volatility is recognized.

Hong Kong was firmly in the background as even healthcare was down despite fears of the delta. Elements of the EV ecosystem have managed gains on the continent as well as semiconductor stocks following the good results of the SMIC. BYD was turned off despite news that 50,492 EVs were sold in July, a 170% increase from the same period last year.

H-Share update

The Hang Seng opened higher but slipped during the afternoon session closing at -0.84% ​​while the Hang Seng TECH fell -2.1% as volumes slipped from -4.01%, or 97%. The 208 Chinese companies of the MSCI

China All Shares was down -1.47%, leading to a decline in Communication -3.94%, Materials -2.08%, Technology -1.96%, Healthcare -1.64 %, industry -1.56%, energy -1.33%, utilities -1.13% and real estate -0.86%. The most traded stocks in Hong Kong by value were Tencent -3.9%, SMIC + 3.91%, Alibaba HK + 0.1%, Kuaishou -15.3%, Meituan -1.12%, BYD -3 , 49%, Geely Auto -0.53%, Xiaomi -2.05%, NetEase -3.76% and Hong Kong stock exchanges + 0.77%. Southbound Stock Connect volumes were high as mainland investors sold – $ 148 million. Trade to the south accounted for 15% of Hong Kong’s turnover.

A-Share Update

Shanghai, Shenzhen and STAR Board experienced a choppy lower logon, rallying green, then sold by closing -0.31%, 0.75% and James Bond -0.07%. volumes were down -0.01%, or 141% of the 1-year average. The 522 mainland stocks within the MSCI China All Shares were down -0.57%, with real estate and utilities gaining + 2.19% and + 0.22% while communication -2.65%, materials -1.62%, commodities -0.96%, financials -0.6%, manufacturers -0.45%, tech -0.28%, health -0.27%, energy – 0.09% and discretionary -0.09%. The most traded countries by value were China Northern Rare Earth -2.22%, Longi Green Energy +1.29%, BYD -2.8%, Tianqi Lithium + 0.91%, Tongwei +1.87%, Kweichow Moutai -1.45%, Sany Heavy Industry -0.56%, Changchun High & New Technology -10%, CATL -2.11% and SMIC + 5.08%. Northbound Stock Connect volumes were subdued as foreign investors sold – $ 304 million of mainland stocks, with northbound trading accounting for 5.5% of mainland revenue. Bonds rallied as the renminbi was stable against the US dollar and copper was down.

Last night’s exchange rate, prices and yields

  • CNY / USD 6.46 vs. 6.46 yesterday
  • CNY / EUR 7.66 vs. 7.66 yesterday
  • 10-year government bond yield 2.80% vs. 2.83% yesterday
  • 10-year Development Bank of China bond yield 3.19% vs. 3.19% yesterday
  • Copper price -0.60% overnight

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