Moonshot Weighs On Wuxi While Nio Fans Rejoice In ET5 Launch

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Asian equities were largely higher while Hong Kong was closed as the Asia dollar index rose overnight.

Hong Kong and Chinese biotech stocks were hit hard after President Biden’s cancer research “Moonshot” initiative was launched, which presents the potential for contract research currently being conducted by Chinese firms. The initiative aims to find a cure for cancer by growing the US biotech industry, which investors saw as a negative for Chinese biotech and healthcare companies. Wuxi Biologics (2269 HK) was Hong Kong’s most-traded stock by value today, falling -19.94%, while WuxiApptech (2359 HK) fell 16.82% as investors shot before asking questions. Large companies like Wuxi already have significant operations in the United States, so the backlash is more felt.

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The Nio (9866 HK) was up +16.81% after releasing its ET5 sedan into a Tesla-like fan frenzy.

Hong Kong Internet names were mixed despite a strong session in the United States yesterday as HK (9618 HK) fell -4.11% without news. However, Hong Kong short sale turnover has decreased recently.

Rumors that Putin, Modi and Xi may meet this week may have an impact on foreign sentiment. Following the closure, Bloomberg is reporting that Chinese banks were asked to report their exposure to debtor group Fosun, according to “sources.” Domestic investors returned from the holiday in a better mood as Shanghai and Shenzhen, however, made gains from their intra-day highs. Investors noted another economic support speech and mixed loan/credit data. Foreign investors bought Mainland shares worth $572 million today through Northbound Stock Connect. The CNY was a touch off versus the US as Chinese Treasury prices eased.

Hang Seng and Hang Seng Tech were up -0.18% and -0.2% volumes from Friday at +2.95% which is 76% of the 1-year average. 271 shares gained while 211 shares declined. Hong Kong short sale turnover declined by -4.81% from Friday, up 71% of the 1-year average as short sale turnover accounted for 16% of total turnover. Value and growth factors were mixed today as large caps outperformed small caps. The top sectors were Tech +1.26%, Staples +1.13%, and Materials 1.04% while Healthcare -9.75%, Utilities -1.16%, and Communications -0.61%. The top sub-sectors Tik Tok Ecosystem, Auto Parts, Semi and Agriculture/Food were related while Biotech, Healthcare Drugs and Software were at the bottom. Mainland investors bought $224 million worth of Hong Kong shares through Southbound Connect with Wuxi Biologics, a medium buy, Meituan a medium buy, Tencent a short buy, while Lee Auto was a short sell and Kuashou a short/ There were moderate sales.

Shanghai, Shenzhen and Star Board deviated +0.05%, +0.33%, and -0.25%, respectively, on volumes -0.94% from Friday, which is 76% of the 1-year average. 2,353 shares rose while 2,132 shares declined. The top sectors were staples +1.38%, discretionary +0.87%, and financials +0.38% while real estate -1.94%, utilities -1.55%, and healthcare -1.31%. The top sub-sectors were related to office supplies and agriculture/food, while biotech, real estate and power utilities were the worst hit. Foreign investors bought Mainland shares worth $572 million through Northbound Stock Connect. Chinese Treasury bonds sold out, CNY versus US$6.93 and Copper fell to +1.41%.

Last Night’s Exchange Rates, Prices and Yields

  • CNY/USD 6.93 vs. 6.92 Friday
  • CNY/EUR 7.04 vs. 6.98 Friday
  • Yield on 10-year government bonds 2.64% vs 2.63% Friday
  • Yield on 10-year China Development Bank bond 2.81% versus 2.80% Friday
  • Copper price +1.41% overnight

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