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Asian equities were mostly higher overnight while Mainland China was closed for the Mid-Autumn Festival. Japan, South Korea, Indonesia, and Malaysia were also closed.
It was a very quiet night, especially given the four market holidays outside of China’s Mid-Autumn Festival: Respect for the Aged Day (Japan), Mawlidal-Nabi (Indonesia), Malaysia Day, and Chuseok – Thanksgiving Day (South Korea). With Mainland China closed tomorrow and Hong Kong closed on Wednesday, I suspect many Hong Kong-based traders took the week off, as volumes fell -46% from Friday.
China’s August economic data release was largely lighter, i.e. lower than expected, leading to speculation that government stimulus will be increased. The stimulus optimism drove Hong Kong to a small gain even without the buying support of Mainland investors via Southbound Stock Connect.
Housing data showed no improvement, as Real Estate stocks underperformed today. Hong Kong’s most heavily traded stocks were Tencent, which gained +0.80%, buying back 2.67 million shares today, Meituan, which gained +2.85% on a bond upgrade by S&P, Alibaba, which fell -0.91% as ultra-short-term traders bet that the lack of Southbound flow today would weigh on the stock, Hong Kong Exchanges, which fell -1.25%, and biotech company Akeso, which gained +16.14%.
Kuiashou gained +4.59% on a broker upgrade while JD.com fell -0.86%, Trip.com gained +0.6%, NetEase fell -1.23%, and Baidu gained +0.67%.
Western media’s China headlines last week were very negative. Nonetheless, the Hong Kong market hung in there, which is a positive sign, in my opinion.
The Hang Seng and Hang Seng Tech indexes gained +0.31% and +0.51%, respectively, on volume that declined -46% from Friday, which is 46% of the 1-year average. 253 stocks advanced while 223 declined. Main Board short turnover fell -19.67% from Friday, which is 50% of the 1-year average, as 18% of turnover was short turnover (Hong Kong short turnover includes ETF short volume, which is driven by market makers’ ETF hedging). The value factor and large caps outperformed the growth factor and small caps. The top-performing sectors were Health Care, which gained +2%, Materials, which gained +1.92%, and Communication Services, which gained +0.77%. Meanwhile, Real Estate fell -2%, Consumer Staples fell -0.82%, and Technology fell -0.1%. The top-performing subsectors were food & beverage, materials, and healthcare equipment. Meanwhile, diversified financials and semiconductors were among the worst-performing. Southbound Stock Connect was closed.
Shanghai, Shenzhen and the STAR Board were closed overnight for the Mid-Autumn festival.
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Last Night’s Performance
Last Night’s Exchange Rates, Prices, & Yields
Mainland China’s currency and bond markets were closed overnight.