Asian markets had a mixed week, with Japan and China underperforming and India outperforming. Global CEOs gathered at the 2024 China Development Forum in Beijing, where some met with Chinese President Xi Jinping. In the internet sector, Meituan saw gains in its stock after better-than-expected earnings, while Alibaba faced challenges with the retraction of its logistics arm’s IPO application. China’s industrial profits for January-February increased by 10% year-over-year after a decline in January.
The month and quarter ended on a positive note for Asian markets that were open, with the Shanghai Composite posting gains in both US dollar and Renminbi terms following a rally from a previous low. The Hang Seng and Hang Seng Tech indexes remained negative year-to-date. Xiaomi entered the electric vehicle industry with the launch of its SU7 sedan, and non-listed Huawei reported a significant increase in net profit for 2023. Agriculture giant Syngenta pulled its Shanghai IPO application, potentially due to regulatory factors.
In Hong Kong, Real Estate underperformed with developer Vanke reporting a decline in net income. The National Team’s favorite ETFs had light volumes, and China removed tariffs on Australian wine, signaling improved diplomatic relations. The Vice Chairman of China’s securities regulator emphasized the country’s commitment to foreign investors during a roadshow in NYC. In the US, despite higher interest rates, equity markets remained resilient, with Edwards pointing out the US money base growth and liquidity pumping into the system.
Chinese markets diverged with Shanghai and Shenzhen closing positively, while the STAR Board saw a decline. The value factor and large caps outperformed growth factors and small caps. Energy, Materials, and Industrials were the top-performing sectors, while Real Estate and Consumer Discretionary sectors saw declines. CNY appreciated against the USD, and treasury bonds rallied. Copper gained, but steel prices were lower. Additionally, Microsoft was highlighted in a defined outcome article, discussing its role as the largest weighting in a Dynamic Dividend Equity Index ETF.
