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TOPSHOT – The sun rises above Shanghai’s Lujiazui skyline in this aerial photo taken on November 13, 2018… [+] Financial District of Pudong (AFP photo by Johannes EISELE) (The photo should be credited to JOHANNES EISELE/AFP via Getty Images.)
Getty Images/AFP/AFP/AFP/AFP/AFP/AFP/AFP/AFP
Important Information
The area was a sea of red yesterday, except for India, Australia, and the Philippines, as the US CPI print shook the timbers of Asian investors. Healthcare was a significant outperformer as Wuxi Biologics disclosed a 135 percent increase in net income, lifting both Hong Kong and Mainland healthcare companies.
Following yesterday’s announcement of a reduction in the bank reserve requirement ratio and the expiration of medium-term lending facility notes to financial institutions tomorrow, the PBOC said that policies will stay unchanged. If the maturing MLF is rolled over by the same amount, the market will be quite interested.
According to the Financial Times, foreign investment in Chinese shares has surged by 49 percent year on year to $35.3 billion, while foreign investment in Chinese Treasury bonds has increased by 50 percent to $75 billion. Foreign investors sold a robust $1.673 billion in Mainland equities today, proving the FT’s timing was off. China’s foreign direct investment increased by 28.7% year on year to $90.6 billion in June.
The possibility of China’s carbon emission market going live this month has grown, with an announcement likely on Friday.
Tencent and Meituan both saw net buying from Mainland investors via Southbound Stock Connect today, helping Chinese internet stocks bounce in Hong Kong. According to Bloomberg, Meituan sold 11.3 million shares to Tencent, bringing their ownership to 17.25 percent. Another indication that businesses are capable of adhering to regulations. Alibaba and Tencent have opened their “walled gardens” to each other, according to the Wall Street Journal. As we’ve mentioned several times this year, this is already happening.
Lithium stocks were down today, putting pressure on the EV ecosystem and clean technology in general. High summer temperatures are projected to increase demand for electricity, thus energy had a good day.
ADDITIONAL INFORMATION FOR YOU

kraneshares msci china all shares

kraneshares country indexes

H-Share Update on China Performance Kraneshares
As volume fell -7.77 percent, or 88 percent of the 1-year average, the Hang Seng Index and Hang Seng TECH Index diverged -0.63 percent and +0.1 percent, respectively. The MSCI index includes 209 Chinese stocks listed in Hong Kong. Materials -2.01 percent, industrials -1.93 percent, real estate -1.59 percent, financials -1.51 percent, and financials -0.7 percent, whereas healthcare +4.19 percent, staples +1.46 percent, utilities +0.62 percent, and energy +0.55 percent. Tencent +0.18 percent, Meituan -1.69 percent, Alibaba Hong Kong +0.58 percent, Wuxi Biologics +6.47 percent, BYD -5.64 percent, Ping -2.08 percent, Hong Kong Exchanges +0.2 percent, Xiaomi +0.56 percent, JD Hong Kong +1.65 percent, and China Construction Bank -1.62 percent were the most heavily traded by value in Hong Kong. Stocks heading south Southbound trade accounted for 13.5 percent of Hong Kong turnover, with mainland investors selling -$28 million worth of Hong Kong equities.
Update on A-Share
Shanghai, Shenzhen, and the STAR Board were all down -1.07 percent, -0.88%, and -2.15 percent, respectively, as volume grew by 0.2% from yesterday, to 133 percent of the one-year average. The 532 mainland stocks in the MSCI China All Shares index were down -0.98%, with healthcare up 1.1% and energy up 0.64 percent, while discretionary was down 2.65%, materials was down 1.79 percent, real estate was down 1.75 percent, financials were down 1.57 percent, communication was down 1.23 percent, tech was down 1.19 percent, and industrials were down 1.12 percent. BYD -7.47 percent, BOE Tech +2.19 percent, GotionHigh-tech +5.95 percent, Tianqi Lithium -9.02 percent, China Northern Rare Earth -2.33 percent, China Three Gorges Renewables -2.58 percent, Hoperun Software +0.99 percent, Longi Green Energy -2.08 percent, CATL -2.07 percent, and Ganfeng Lithium -5.715 percent were the mainland’s most heavily traded by value. Foreign investors sold -$1.673 billion of mainland equities today, resulting in elevated/average Northbound Stock Connect volumes. The Chinese yuan gained 0.04 percent against the US dollar, bonds were unchanged, and copper was down.
Exchange Rates, Prices, and Yields from the Previous Night
6.47 CNY/USD vs. 6.47 yesterday
CNY/EUR 7.63, down from 7.66 the day before.
The yield on a one-day government bond is now 1.70 percent, down from 1.73 percent yesterday.
The 10-year government bond yield is 2.94 percent, up from 2.93 percent yesterday.
The 10-year China Development Bank Bond yield is now 3.34 percent, up from 3.32 percent yesterday.
Overnight, the copper price fell by 0.65%./nRead More

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