Asian equities were mostly higher, with Mainland China reopening after the Labor Day holiday. The Ministry of Culture and Tourism reported an increase in domestic travel and spending in China compared to last year and 2019. Real estate policy support in Shenzhen and Hong Kong’s market activity indicated positive trends in the region. Mainland investors were active in the Southbound Stock Connect, buying Hong Kong-listed ETFs and stocks. The most heavily traded stocks in Hong Kong included Tencent, Meituan, and Alibaba, showing signs of optimism among trading desks.
Mainland China reopened with strong performance in Shanghai and Shenzhen, supported by foreign investors buying a net worth of Mainland stocks. The Chinese yuan appreciated against the US dollar, indicating strengthening of the currency. The Hang Seng and Hang Seng Tech indexes also gained on high volume, with the value factor outperforming the growth factor. The top-performing sectors were Utilities, Industrials, and Health Care, while Real Estate fell. Southbound Stock Connect volumes were light, with Mainland investors buying Hong Kong-listed stocks and ETFs.
Shanghai, Shenzhen, and the STAR Board saw gains, with all factors positive and all sectors in the green. The growth factor and small caps outperformed the value factor and large caps. The top-performing subsectors were motorcycles, chemicals, and chemical fibers. Northbound Stock Connect volumes were light, as foreign investors bought Mainland stocks, including Kweichow Moutai and China Merchants Bank. CNY and the Asia Dollar Index were higher versus the US dollar, while the Treasury curve steepened. Steel gained while copper prices were down.
Recent developments include President Xi’s visit to France for trade talks and Geely Automobile’s plans for an IPO of its electric vehicle brand Zeekr in the US. Berkshire Hathaway’s annual shareholder meeting is drawing interest from Chinese investors for Warren Buffett’s comments on the company’s cash position. The article “China Market Connect March 2024: Marching in Asia” provides insights into the market trends in China. Overnight exchange rates, prices, and yields showed a slight decline in copper prices but an increase in steel prices. The overall outlook for the Asian markets appears positive, with signs of growth and investor activity in various sectors.