North Asian equity markets were closed after technical-driven losses in US equity markets, while South Asian equity markets edged higher. The Hang Seng Index was down -0.83%, although Hong Kong Internet shares weighed in Hang Seng Tech -1.75%. Volumes were lighter and down -36.89% from yesterday which is only 37% of the 1-year average.
Hong Kong’s internet names were shutting down despite positive news such as JD.com increasing its buyback from $2B to $3B, Reuters reported that Alibaba was looking to sell its stake in Weibo, and Meituan and Kuiashou formed a partnership. announced. Also in news, according to Reuters, instead of listing new shares in Hong Kong, Didi will allow American shareholders to convert their US-listed shares into Hong Kong-listed shares. This differs from previous Hong Kong relistings, in which companies sold new shares to investors. In theory, investors should be happy with the decision not to dilute existing shares even though the pre-market stock is closed. This technology allows companies like Didi to re-list in Hong Kong while avoiding the need for a two-year listing in Hong Kong. I think we’ll see similar moves taken by other recent US IPOs like Full Truck and KE Holdings.
All sectors in Hong Kong declined today as decliners outperformed advancers 3 to 1. Southbound Stock Connect was closed today, so Hong Kong shares had no support from Mainland investors. Stocks related to lithium batteries were among the only bright spots in Hong Kong and China.
Mainland markets were also closed with losses across sectors, as profit-taking hit liquor stocks hit hard as Quecho Mutai -4.54% and Wuliangye Yibin -5%. Shanghai -0.91%, Shenzhen -0.81%, and Star Board -0.98% as volumes were flat from yesterday which is 95% of the 1-year average. Northbound Stock Connect volume was lighter as foreign investors bought 103mm of Mainland stock. Chinese Treasury bonds edged up and the CNY appreciated a touch against the US$; The copper was off.
There was an article about how China’s adoption of mobile payments is affecting bank branches and ATMs. In 2021, Chinese banks closed 2,398 branches, while the number of ATMs in China decreased from 69,400 to 959,700.
Last Night’s Exchange Rates, Prices and Yields
- CNY/USD 6.37 Vs 6.37 Yesterday
- CNY/EUR 7.20 vs. 7.22 Yesterday
- Yield on 10-Year Government Bonds 2.79% vs 2.80% yesterday
- Yield on 10-year China Development Bank bonds 3.07% versus 3.08% yesterday
- Copper price -0.13% overnight