Asian equities were mostly lower overnight despite the significant comeback in the US yesterday. Hong Kong saw a slight uptick in volume as Mainland China saw lower volumes than yesterday.
Sales during the 6/18 Shopping Festival were somewhat subdued this year, as expected. Nonetheless, major E-Commerce platforms’ sales during the festival grew compared to last year. JD.com reported selling + 20% more items compared to last year, although that number represents the slowest growth in 5 years. While headlines are saying that the festival was a flop, seeing this growth amid continuing COVID hesitancy shows that the Chinese consumer is alive and well. Our friends at Alibaba said that this year’s shopping festival demonstrates new consumer preferences and appetites, some stemming from the urban lockdowns that have been occurring. Sales of fishing equipment on Alibaba’s Tmall platform increased by + 50% year-over-year. A similar rise was seen in sales of camping supplies and other gear for outdoor activities.
The real estate sector continued yesterday’s rebound overnight and was a bright spot in both Hong Kong and Mainland China. The government has been steadily relaxing purchase and down payment restrictions and that has translated to higher home sales.
As the price of iron ore continues to drop, China steel manufacturers are benefitting. Inner Mongolia Baotou Steel gained nearly + 10% overnight.
Online health care platforms were down sharply overnight as regulators announced that they would be revising their definition of “third party platforms” as it pertains to the provision of medicine. We will provide an update as we receive more color on this issue, but investors appear to be “shooting first” and asking questions later.
Foreign investors net sold $ 1 billion worth of Mainland China-listed stocks overnight via Northbound Stock Connect, notching the third consecutive day of sales by foreigners following Mainland equities’ relatively strong performance in recent weeks. Meanwhile, Mainland investors net bought $ 230 million worth of Hong Kong-listed stocks via Southbound Stock Connect.
The Hang Seng and Hang Seng Tech indexes fell -2.56% and -4.37%, respectively, on a volume that increased by + 6% from yesterday.
Shanghai, Shenzhen, and the STAR Board closed -1.20%, 1.28%, and -1.78%, respectively, on a volume that decreased by -8% from yesterday.
Last Night’s Exchange Rates, Prices, & Yields
- CNY / USD 6.71 versus 6.69 yesterday
- CNY / EUR 7.07 versus 7.06 yesterday
- Yield on 1-Day Government Bond 1.21% versus 1.20% yesterday
- Yield on 10-Year Government Bond 2.78% versus 2.79% yesterday
- Yield on 10-Year China Development Bank Bond 2.99% versus 2.99% yesterday
- Copper Price -2.01% overnight