Hong Kong would have had a much worse day if not for volume leader Tencent’s gain of +3%/+79 index points.
Asian equities were mixed overnight as investors kept an eye on recent coronavirus flare-ups in the US and Beijing. Fortunately, daily new cases in Beijing declined to less than 40 over the weekend. Hong Kong would have had a much worse day if not for volume leader Tencent’s gain of +3%/+79 index points. Speculation regarding a potential bid for iQiyi (ticker IQ) has lifted the stock of late. Southbound Connect volumes were elevated as we head into the Dragon Boat Festival market holidays on Thursday and Friday.
Hong Kong Exchanges had a strong day rising +3.73% as CEO Li participated in a Bloomberg virtual conference saying that Southbound Connect would include secondary Hong Kong listings (i.e. Alibaba
BABA) in the future. He also commented that he does not believe China’s new national security law will jeopardize Hong Kong’s status as a financial hub.
AIA jumped +1.81% on news that its Shanghai subsidiary will operate independently, making it the first independent foreign insurance company operating in China.
1 and 5-year Loan Prime Rates were left unchanged at 3.85% and 4.65%, which was in line with expectations. I’ve noticed that China bond yields have increased over the last month or so by nearly 10 basis points (0.1%). My colleague Fernando, who has a background in fixed income, would be doing backflips over 10bps, which, for a stock person like me, is a yawn.
Mainland markets managed a small gain early in the day on reports that the Shanghai Composite Index would include STAR companies in its performance calculation. Shenzhen ended the day higher while Shanghai ended the day lower.
Semiconductor Manufacturing’s IPO on the STAR Exchange is coming soon after having received approval in record time. The STAR Exchange is an outcropping of the Shanghai Stock Exchange that caters to high-growth tech companies, akin to the Nasdaq
NDAQ in the US.
