Henry Kissinger, Mark Liu & Hu Xijin Make Headlines

Key Information

Asian equities had been blended on gentle volumes as China and Hong Kong had been off.

Henry Kissinger’s outstanding assembly with President Xi was front-page information in China and Asia. Superb to see the one-hundred-year-old doing his half to fix relations between the US and China. President Xi commented China is able to “…discover with america the correct manner for the 2 international locations to get alongside and take their relations steadily ahead, which can be good for each side and ship advantages to the world”. Attention-grabbing!

Extra optimistic feedback in a single day from authorities officers on supporting the non-public economic system although traders are asking, “The place’s the meat?!” i.e., motion not speak as Hong Kong and China slumped in afternoon buying and selling. We’ll seemingly want to attend for the end-of-month Politburo assembly for particular measures to be launched.

The PBOC stated “No Mas!” to the renminbi’s weak spot versus the US greenback as CNY gained +0.79% versus the US greenback closing at 7.16 versus yesterday’s 7.21. As anticipated, the 1 and 5-year mortgage prime charges had been left unchanged although a good quantity of chatter about housing curbs being dialed again.

Actual property was the highest performer in China +1.31% and HK +2.21%. The EV ecosystem was blended with Tesla’s monetary outcomes weighing on the house although EVs’ buy tax exemption was prolonged for 4 years. Smartphone digital camera maker and Apple provider Sunny Optical (2382 HK) fell -13.65% after releasing earnings steerage for the primary half of the 12 months -65% to -70%. The autumn weighed on tech as progress shares/sectors had been weak in each Hong Kong and China.

Taiwan Semis’ monetary outcomes got here out after the shut although its no-nonsense Chairman Mark Liu continues to earn my respect along with his candor. The weak outlook ought to be a chilly blanket on US tech AI mania and valuations. Time will inform!

Hong Kong web shares didn’t match the sturdy efficiency of their US ADRs on no information. Southbound Inventory Join noticed a really massive internet promote of -$1.77B although the wrongdoer seems to be massive promote in a Hong Kong-listed ETF as most shares had been internet buys. Shanghai closed slightly below the three,200, Shenzhen above 2,000, and Hold Seng slightly below 19,000.

Authorities social media persona and up to date inventory purchaser Hu Xijin famous he took a loss at the moment, although he commented on the federal government speak on supporting the economic system. His shopping for of inventory for the primary time and in a really public manner has been known as “Hu Xi’s backside,” although at the moment’s market motion took Shanghai and Shenzhen beneath his preliminary entry level. He acknowledged traders wish to see such speak applied. I couldn’t agree extra!

The Hold Seng and Hold Seng Tech fell -0.13% and -1.25% on quantity -57.93% from yesterday, 93% of the 1-year common. 197 shares superior, whereas 290 declined. Fundamental Board brief turnover fell -57.94% from yesterday, which is 79% of the 1-year common, as 14% of turnover was brief turnover. Worth elements outperformed progress elements as small caps outperformed massive caps. High sectors had been actual property +2.22%, supplies +0.74% band healthcare +0.27% whereas tech -2.92%, utilities -0.9% and vitality -0.63%. The highest sub-sectors had been actual property, banks, and supplies, whereas technical {hardware}, media, and semis had been the worst. Southbound Inventory Join volumes had been average as Mainland traders bought a wholesome -$1.77B of Mainland shares, with Tencent a small/average purchase, China Cellular, Meituan, XPeng, and Kuiashou small internet buys.

Shanghai, Shenzhen, and STAR Board fell -0.92%, -1.05%, and -1.43% on quantity +12.13% from yesterday, 87% of the 1-year common. 1,164 shares superior, whereas 3,507 declined. Worth elements outperformed progress elements, whereas massive caps outpaced small caps. The highest sectors had been actual property +1.35%, supplies +0.99%, and staples +0.75%, whereas tech -1.82%, communication -1.73% and discretionary -0.46%. The highest subsectors had been fertilizer, schooling, and chemical trade, whereas pc {hardware}, communication gear, and digital part gear had been the worst. Northbound Inventory Join volumes had been average/gentle as international traders purchased +$48mm of Mainland shares, with Kweichow Moutai a small internet purchase, Foxconn a average internet purchase, and Longi Inexperienced Tech a small/average internet promote. CNY and the Asia greenback index gained +0.79% and +0.44% versus the US greenback. Treasury bonds rallied whereas copper and metal gained.

Final Evening’s Efficiency

Final Evening’s Change Charges, Costs, & Yields

• CNY per USD 7.16 versus 7.21 yesterday
• CNY per EUR 8.01 versus 8.10 yesterday
• Yield on 10-Yr Authorities Bond 2.62% versus 2.62% yesterday
• Yield on 10-Yr China Growth Financial institution Bond 2.74% versus 2.75% yesterday
• Copper Value +0.07% in a single day
• Metal Value +0.99% in a single day