KraneShares
Asian equities closed mixed, as Japan and India outperformed and the US dollar weakened overnight.
Hong Kong鈥檚 four-day winning streak and Mainland China鈥檚 three-day winning streak both came to an end with profit taking overnight. Both markets bounced around the room on volumes that were well above their 1-year averages.
It was very interesting that Southbound Stock Connect volumes accounted for 64% of turnover in Hong Kong today. I can鈥檛 recall a percentage that high, as Mainland investors poured $673 million into Hong Kong-listed stocks and ETFs, net of selling. Does the high Connect percentage indicate a lack of foreign investor participation? I suspect so, which makes me bullish, as the charts of the Shanghai, Shenzhen, Hang Seng, and Hang Seng Tech all continue to grind higher. So far this year, Southbound buying of Hong Kong stocks is up to $92.86 billion versus 2024鈥檚 total of $103 billion, 2023鈥檚 total of only $40.70 billion, and 2022鈥檚 total of $49.20 billion.
Recent outperformers, including pharmaceutical, brokerage, and insurance stocks, were hit with profit taking on no negative news, while mining and energy outperformed.
In fact, we had positive news from the National Development & Reform Commission (NDRC) that the third round of funds for the consumption subsidies will be allocated in July. The third round will be financed by the issuance of RMB 200 billion worth of ultra-long-dated Treasury bonds.
Hong Kong鈥檚 most heavily traded stock was brokerage firm Guotai Junan International, which fell -4.32%, after rising +198% yesterday on its cryptocurrency trading approval. Alibaba fell -2.86% though I am not seeing any news. Alibaba will release its annual report after the close, which will give me something to read on my flight home tonight.
China Travel gained +85% on reports that Hong Kong tourist numbers were strong during May鈥檚 Golden Week holiday. Other tourist stocks were up around +1%, though I suspect short sellers got rolled on China Travel鈥檚 surge.
MORE FOR YOU
JD.com gained +0.23% as founder Richard Liu attends the 鈥淪ummer Davos鈥 in Tianjin. Shockingly, there has been little Western media coverage of the event, which makes me suspect something good is occurring. Harvard鈥檚 Graham Allison stated at the event, 鈥淚 would be surprised if in the next week or so we do not see a memorandum of understanding (MOU) coming out of the discussions that have been going on between Bessent and He鈥,鈥 according to the South China Morning Post. I鈥檝e not seen that elsewhere, but it would be a significant catalyst.
Privately-held robotics company Unitree stated that the firm, founded in 2016 with one employee, now has 1,000 employees and RMB 1 billion in annual revenue. If you didn鈥檛 catch our Nasdaq bell ringing yesterday, take a look. A Unitree humanoid robot rang the bell!
All in all, a quiet night!
New Content
Read our latest article:
Navigating Global Crosswinds: Carbon Markets Respond to Tariff Tactics and Executive Orders
Please click here to read
Last Night鈥檚 Performance
KraneShares
KraneShares
KraneShares
KraneShares
KraneShares
KraneShares
Last Night鈥檚 Exchange Rates, Prices, & Yields
CNY per USD 7.17 versus 7.17 yesterday
CNY per EUR 8.41 versus 8.32 yesterday
Yield on 10-Year Government Bond 1.65% versus 1.65% yesterday
Yield on 10-Year China Development Bank Bond 1.69% versus 1.70% yesterday
Copper Price 0.38%
Steel Price -0.13%
Editorial StandardsReprints & Permissions