Semiconductors, internet and clean tech end week on a positive note, weekly overview

Week overview

  • Asian stocks opened the week mixed on Monday as Chinese internet stocks listed in Hong Kong rebounded and the Chinese government announced measures to address the power shortage, including letting energy prices float more freely.
  • Rising energy and commodity prices continued to weigh on broad Asian equities on Tuesday, as Chinese President Xi Jinping reiterated China’s commitments to the renewable energy transition at a UN clean energy summit.
  • Hong Kong’s market was unexpectedly closed on Wednesday due to Typhoon Kompasu. Meanwhile, China’s September import/export data came in, showing that exports outpaced imports for the period.
  • China released its September CPI, a measure of consumer price inflation, which showed inflation was lower than expected but still high. Meanwhile, the PPI, which measures what producers pay for inputs, grew more than 10% year-over-year as energy prices rose. Shares of solar energy recovered after a correction due to the rising cost of the materials used in photovoltaic panels.

Friday’s most important news

Asian stocks had a strong day following yesterday’s strong performance from the US stock market. Hong Kong was open again after Wednesday’s close due to a typhoon and yesterday’s market holiday. The current market action in Hong Kong has been accompanied by strong volume, which is a good sign for the markets.

Hong Kong-listed internet stocks had a strong day as the Hang Seng Tech Index rose +1.92% versus the Hang Seng Index, which gained +1.48%. Yes, there is speculation that online brokers operating in China and listed in the US may face increased regulatory oversight. However, these names are usually not large enough to be included in the index.

We also had news that LinkedIn is closing its app in China, although the headlines are a bit misleading as they eliminate the social media feature while focusing on professional networking and hiring. Today’s move, despite those headlines, is a positive sign. It’s also worth noting how this “news” weighed on US-listed Chinese stocks yesterday. Investors in Asia didn’t seem to care. Maybe we shouldn’t either?

Hong Kong-listed online education stocks jumped after reports the companies could offer vocational training. Apex Technical School in New York, an automotive mechanical vocational school, ran TV ads with a free toolkit after graduation. Perhaps these Chinese companies present a similar hook.

Interestingly, Tencent was a small net sale in Southbound Stock Connect overnight, although Meituan was a net buy, extending its inflow streak to seven consecutive trading days.

The other big players today in both China and Hong Kong have been in the semiconductor and clean technology fields, including electric vehicles (EVs), solar and wind. Strong EV sales were a catalyst, along with mainland-listed battery maker CATL signing a deal with a US EV start-up.

Real estate stocks were out despite rumors that banks will raise mortgages to support the space.

Foreign investors today bought $418 million worth of mainland equities through the Northbound Stock Connect trading platform.

H-Share update

The Hang Seng opened higher and continued to climb to +1.48% while volume increased +31% from yesterday, which is 105% from the 1-year average. The 210 Chinese companies listed in Hong Kong and within the MSCI China All Shares Index gained +1.5%, led by communications +2.49%, discretionary +2.44%, materials +2.33% and technology +1% . Meanwhile, energy -1.2% and real estate -0.97%. Hong Kong’s most traded stocks by value were Tencent, which gained +2.57%, Meituan, which gained +4.39%, Alibaba HK, which gained +0.31%, BYD, which gained +7.57% , Anta Sports, who lost -1.22% , AIA, who won +0.34%, Geely Auto, who won +7.96%, Wuxi Biologics, who won +0.92%, Ping An Insurance, who + 1.23% won, and China Longyuan Power, which won +7.34%. Southbound Stock Connect volumes were moderate to high as mainland investors bought $26 million worth of Hong Kong shares as Southbound Connect trading accounted for 12.5% ​​of Hong Kong sales.

A-Share update

Shanghai, Shenzhen and the STAR Board gained +0.4%, +0.05% and +1.18% respectively, while volume increased +14.87%, which is 101% of the 1-year average. The 542 mainland stocks within the MSCI China All Shares Index gained +0.56%, led by energy +3.29%, technology +1.79%, industrials +1.06% and materials +1%. Meanwhile, health care -0.92%, real estate -0.47% and basic products -0.28%. The most traded mainland stocks by value were CATL, which gained +6.89%, Longi Green Energy, which gained +3.6%, BYD, which gained +3.81%, Wuliangye Yibin, which fell -2.37%, Cosco Shipping, which was down -6.35%, Ganfeng Lithium, which was down -0.54%, Tianqi Lithium, which was up +3.39%, Zijin Mining, which was up +2.96%, Muyuan Foods, which was up +4 .37% won, and Tianjin Zhonghuan Semiconductor, who won +0.57%. Northbound Stock Connect volumes were moderate to high as foreign investors bought $418 million worth of mainland stock as Northbound Connect trading accounted for 8.3% of mainland revenue.

Last night’s exchange rates, prices and returns

  • CNY/USD 6.44 vs 6.44 yesterday
  • CNY/EUR 7.46 vs 7.46 yesterday
  • One-day government bond yield 1.71% vs. 1.70% yesterday
  • 10-Year Treasury Yield 2.97% vs. 2.96% Yesterday
  • Yield on 10-Year China Development Bank Bond 3.30% vs. 3.26% Yesterday
  • Copper price +2.31% today

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