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DiDi Didi Key News’s headquarters Asian stocks were divided today, with Hong Kong-listed growth/tech companies rebounding after yesterday’s sell-off in response to China’s regulatory action against Didi. An investigation into the company’s data practices has been launched by the China Cyberspace Administration. The agency has barred new users from downloading the app while it conducts a data security review, but current users are still able to use it. Full Truck Alliance (YMM) and Kanzhun, which were newly listed, are also affected (BZ).
Because of the post-IPO regulatory action, there is worry that US policy toward US-listed Chinese businesses may attract more attention. So far, the financials of the companies have been unaffected by Chinese regulatory action. The stock of Chinese companies listed in the United States and Hong Kong has taken a hit as a result of the regulatory action.
It’s worth noting that credit default swaps on Alibaba and Baidu bonds have gotten cheaper over the last year. Credit default swaps serve as a good indicator of credit risk because they are insurance for bondholders.

kraneshares Alibaba Credit Default Swap Yield

kraneshares Baidu Credit Default Swap Yield MORE FOR YOU
Tencent’s credit default swaps have been cheaper for shorter-term bonds, but have gotten a little more expensive for longer-term bonds.

kraneshares Tencent Credit Default Swap Yield

Fixed-income investors aren’t pricing in increased risk for the companies’ ability to make coupon payments and repay bonds, which contrasts sharply with stock market behavior.
New criteria for oncology medication testing, which are in line with worldwide standards, weighed on healthcare equities in Hong Kong and China. Brokers believe the market overreacted because the restrictions should benefit the industry in the long run.
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kraneshares performance table

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kraneshares performance table

Update on H-Share
The Hang Seng started lower and continued lower, closing -0.25% lower on volume that was -12.4 percent lower than yesterday, or 88 percent of the 1-year average. Healthcare -5.81 percent, staples -1.37 percent, tech -1.32 percent, and energy -1.08 percent were among the 209 Chinese businesses listed in Hong Kong, with discretionary +0.87 percent, communication +0.82 percent, financials +0.75 percent, and real estate +0.42 percent leading the way. Tencent, which rose +0.9 percent, Wuxi Biologics, which fell -8.41 percent, Meituan, which rose +0.98 percent, BYD, which fell -3.2 percent, Alibaba HK, which rose +1.65 percent, Xiaomi, which fell -0.19%, Ping An, which rose +1.29 percent, HK Exchanges, which rose +2.33 percent, SMIC, which fell -2.42 percent, and China Construction Bank, which fell -2. Mainland investors were net sellers of Hong Kong equities, causing Southbound Stock Connect volumes to spike.
Update on A-Share
Shanghai, Shenzhen, and the STAR Board were all down -0.12%, -0.32%, and -2.74 percent, respectively, as volume surged by 10.72 percent. The MSCI China All Shares Index was down -0.2 percent, with utilities up +2.32 percent, real estate up 2.21 percent, materials up 1.89 percent, financials up 0.96 percent, and discretionary up 0.65 percent, while healthcare was down -3.87 percent, tech down 0.94 percent, and staples down 0.51 percent. BYD, which rose +0.38 percent, Three Gorges Renewables, which rose +9.93 percent, Tianqi Lithium, which fell -3.93 percent, CATL, which fell -0.78 percent, Jiangsu Hoperun Software, which rose +9.35 percent, Hangzhou Silan Micro, which fell -5.66 percent, Ganfeng Lithium, which rose +2.26 percent, COSCO Shipping, which rose +1.78 percent, COSCO Shipping, which rose Foreign investors were active today via Northbound Stock Connect, selling -$9 million in Mainland stocks. The Chinese yuan rose against the US dollar, bonds fell, and copper rose.
About KraneShares
The investment manager for KraneShares ETFs is Krane Funds Advisors, LLC. Our China-focused ETFs offer investors a way to capitalize on China’s prominence as a key component of a well-designed investment portfolio. We aspire to create cutting-edge, first-to-market strategies based on our strong partnerships and extensive investment experience. We seek to provide real diversity by keeping investors up to date on global market developments. China International Capital Corporation owns the majority of Krane Funds Advisors, LLC (CICC)./nRead More

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