Asian equities were mixed overnight as Hong Kong underperformed and Mainland China outperformed.
Alibaba’s leadership changes went effective today: Joe Tsai has assumed his new role as Executive Chairman and Eddie Wu has assumed his role as CEO. For more on this leadership reshuffle, please check out our latest Internet Report. Alibaba’s former CEO Daniel Zhang has announced that he will be leaving the company. For now, new CEO of the holding company Eddie Wu will also oversee the cloud intelligence group, which Mr. Zhang was supposed to run, in the interim. Rumor has it that Zhang will nonetheless continue to work with the holding company on innovative initiatives.
China’s August CPI indicated mild inflation of +0.1% year-over-year, indicating that China’s consumer prices are no longer in deflation territory. We knew that deflation was not going to be sustained or significant, but the slight uptick in consumer prices is positive for the economy overall as it may encourage more spending (money being potentially worth less in the future means spend it now).
The Chian Securities Regulatory Commission (CSRC), China’s SEC, met with foreign institutional investors including Blackwater and Bridgewater to gather their input on how to improve the structure of China’s capital markets.
Despite Xi’s absence, Biden reportedly met with China’s Premier Li on the sidelines of the G20.
Growth and technology stocks were lower overnight though there was little clear direction between growth and value as Utilities constituted one of the lowest-performing sectors in both Hong Kong and Mainland China.
The Hang Seng and Hang Seng Tech indexes both closed lower by -0.58% and 0.21%, respectively, on volume that increased +43% from Friday. Mainland investors sold a net -$1.3 billion worth of Hong Kong stocks overnight via Southbound Stock Connect. The top-performing sectors were Health Care, which gained +3.52%, Consumer Staples, which gained +1.11%, and Communication Services, which gained +0.94%. Meanwhile, the worst-performing sectors were Real Estate, which fell -1.56%, Utilities, which fell -1.47%, and Consumer Discretionary, which fell -1.08%.
Shanghai, Shenzhen, and the STAR Board all closed higher by +0.84%, +0.90%, and +0.67%, respectively, on volume that increased +24% from Friday. Foreign investors bought a net $286 million worth of Mainland stocks overnight via Northbound Stock Connect. The top-performing sectors were Health Care, which gained +3.14%, Communication Services, which gained +2.16%, and Consumer Discretionary, which gained +2.09%. Meanwhile, the worst-performing sectors were Real Estate, which fell -0.02%, Utilities, which gained +1.04%, and Industrials, which gained +1.23%.
Last Night’s Performance
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.34 versus 7.33 yesterday
- CNY per EUR 7.87 versus 7.84 yesterday
- Yield on 1-Day Government Bond 1.45% versus 1.45% yesterday
- Yield on 10-Year Government Bond 2.64% versus 2.64% yesterday
- Yield on 10-Year China Development Bank Bond 2.77% versus 2.77% yesterday
- Copper Price -0.43% overnight
- Steel price -0.92% overnight