Assessment of the week

  • Asian shares have been combined this week whereas Hong Kong-listed web and property shares outperformed.
  • President Biden met President Xi on the sidelines of the G20 on Monday, marking a key enchancment in relations between the 2 superpowers and the primary time the leaders have met head to head. Their assembly was adopted by a gathering between US Treasury Secretary Janet Yellen and the Chinese language central banker.
  • High authorities on Monday outlined a 16-point plan to assist builders, which included extra leniency than markets anticipated and led to a powerful rebound within the sector.
  • Tencent, Tencent Music, and Alibaba all posted robust, however not stunning Q3 outcomes this week. Income Overview beat income, which grew +11.4% year-over-year to RMB243.54 billion, from an estimate of RMB243.07 billion. The corporate’s web margin additionally elevated to 2.4% from 1.1% within the third quarter of 2021, a file margin. It was a beat for each income and earnings, which is spectacular given the macroeconomic situations the corporate has confronted over the previous 12 months. The corporate’s outcomes from Singles Day shall be included in its fourth quarter earnings.

New keys

Asian shares ended the week combined, which is becoming for a gradual week though Hong Kong and particularly Hong Kong tech shares had a great week. International traders have applauded the resumption of diplomatic dialogue between China and america on the G-20 in Bali and at Asia-Pacific financial cooperation conferences in Bangkok. Asian markets pared their positive aspects in afternoon buying and selling as North Korea fired a missile.

There have been 2,276 new covid instances and 22,853 asymptomatic instances in China as we speak as healthcare was the most effective performing sector on the mainland, though the sector was down barely in Hong Kong. Buyers acknowledge that dynamic zero COVID will result in extra instances, together with those that will want remedy. A mainland media supply famous the deployment of CanSino Biologics’ inhalable covid vaccine in 14 cities, together with Beijing and Shanghai. In the meantime, Yiling Pharmaceutical (002603 CH) gained +6.07% in a single day and was the mainland’s most traded inventory by worth, hitting a 52-week excessive after rising 48% this week. The corporate introduced that it had utilized for a medical trial to deal with the frequent chilly utilizing conventional Chinese language drugs.

Hong Kong-listed web shares bucked the market weak point as we speak with strong positive aspects, after Alibaba’s +2.17% and NetEase’s +3.67% acquire after the 2 corporations topped analysts’ expectations in addition to robust buyback packages. HK gained +3.67%, following Alibaba increased forward of as we speak’s US market open. Tencent was down -1.44% regardless of the corporate receiving new gaming approval with NetEase. Tencent had one other day of sturdy web shopping for by way of Southbound Inventory Join, which noticed a uncommon web unload of Hong Kong shares by mainland traders.

It is price mentioning that distressed developer Nation Backyard has seen 5 straight days of Southbound Join web purchases this week. Mainland equities have been with out information aside from a number of stories of fastened revenue fund redemptions because the PBOC’s feedback on the inflation watch took traders without warning. Two exchange-traded cash market ETFs noticed massive outflows this month on an absolute foundation, though outflows characterize solely round 5% of property underneath administration.

The Hold Seng and Hold Seng Tech indices diverged to shut -0.29% and +0.57%, respectively, on quantity that was down -8.53% from yesterday, or 112% of the typical over 1 yr. 143 shares rose, whereas 347 fell. Motherboard brief income decreased -26.26% from yesterday, or 93% of the 1-year common, as 14% of as we speak’s income was brief . Progress elements outperformed worth elements, with massive caps outperforming small caps. Client Discretionary was the one constructive sector, gaining +2.25%, whereas Actual Property fell -2.6%, Financials -1.57% and Industrials -1.29%. The most effective performing subsectors have been meals, media and retailers, whereas semiconductors, actual property and transportation have been among the many worst. Southbound Inventory Join volumes have been excessive at 1.5x the 1-year common as mainland traders offered -$311 million in Hong Kong shares, Tencent a big web purchase, Meituan a web promote reasonable and Kuaishou a small web purchase.

Shanghai, Shenzhen and the STAR Board have been down -0.58%, -0.48% and -0.93% respectively on quantity that was up +7.4% from yesterday, or 101% of the typical over 1 yr. 1,255 shares rose whereas 3,359 shares fell. Progress and worth elements have been combined, with massive caps outperforming small caps. The most effective performing sectors are healthcare which gained +1.62%, communication providers which gained +1.12% and business which gained +0.01%. In the meantime, Know-how fell -1.36%, Power -1.07% and Supplies -1.05%. The most effective performing sub-sectors have been training, biotechnology and telecommunications, whereas marine/delivery, software program and aerospace have been among the many worst. Treasuries rallied, the CNY rose +0.41% towards the US greenback to 7.12 whereas copper fell -0.69%.

China City Mobility Tracker

We proceed to see metro site visitors stagnate/lower, besides in Guangzhou, which has seen a speedy turnaround that appears to substantiate the zero COVID momentum within the metropolis. City site visitors continues to deteriorate, particularly in Shanghai, which additionally appears to substantiate the zero COVID momentum.

Efficiency final night time

Final night time’s change charges, costs and yields

  • CNY for 7.12 USD towards 7.16 yesterday
  • CNY for 7.37 EUR towards 7.41 yesterday
  • In a single day authorities bond yield 1.20% vs. 1.22% yesterday
  • 10-year authorities bond yield 2.83% vs. 2.80% yesterday
  • China Improvement Financial institution 10-year bond yield 2.96% vs. 2.94% yesterday
  • Copper value -0.69% in a single day

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