Asian equities saw a mixed performance with Hong Kong, Shanghai, and Shenzhen all closing higher, despite the US dollar’s strength. Real estate stocks faced profit-taking after a strong performance on Friday, with the sector falling in both Mainland China and Hong Kong. The market reacted skeptically to the new policies announced on Friday, but Chinese financial media noted strong apartment sales in Shenzhen and Beijing over the weekend.
In Hong Kong, the most heavily traded stocks included Tencent, Alibaba, Meituan, Ping An Insurance, and Sense Time. Mainland investors bought a net $319 million worth of Mainland stocks via Southbound Stock Connect, bringing the year-to-date total to $31.4 billion. The Loan Prime Rates remained unchanged, while Didi announced the elimination of the role of President, with Jean Liu stepping down from the position but remaining with the company.
Politicians are increasingly talking about tariffs, drawing parallels to the protectionism and isolationism of the 1920s. The Hang Seng and Hang Seng Tech indexes experienced gains, with growth and small caps outperforming value and large caps. Southbound Stock Connect volumes were high, with Mainland investors buying a net $319 million worth of Hong Kong-listed stocks and ETFs. Shanghai, Shenzhen, and the STAR Board all closed with mixed performance, with growth and large caps outpacing value and small caps.
The top-performing sectors in Hong Kong were Materials, Utilities, and Energy, while the worst-performing sectors were Real Estate, Industrials, and Technology. Similarly, in Shanghai, the top-performing sectors were Energy, Materials, and Utilities, while the worst-performing sectors were Real Estate, Consumer Discretionary, and Financials. Northbound Stock Connect volumes were moderate, with CATL, Wuliangye, and CITS being moderate net buys. CNY and the Asia Dollar Index were lower versus the US dollar, while treasury bonds fell and copper prices rose.
Upcoming webinars on May 29th and June 11th will discuss China’s equity market potential and the likely impact of the US election on US-China relations. Exchange rates, prices, and yields saw slight fluctuations, with CNY per USD at 7.23 and CNY per EUR at 7.86. The yield on 1-Day Government Bond was 1.30%, while the yield on 10-Year Government Bond was 2.32%. Copper prices rose by 4.14%, while steel prices increased by 0.54%.
