Key News
Asian equities mostly followed Wall Street lower overnight, except for Mainland China and Hang Seng Tech, as the Philippines and Singapore were hit the hardest.
Yesterday’s market tantrum in the US and China’s subsequent gains overnight, though Hong Kong was nearly flat overall, highlight the diversification benefits of owning China. Were investors prepared for this? Probably not. US-listed China stocks, especially internet stocks, are rallying this morning after a slump yesterday. Mainland investors were net sellers of Hong Kong-listed stocks and ETFs overnight after a record single-day inflow yesterday.
President Trump is reported to be planning a trip to China to meet with Xi in April before a “Birthday Summit” in June (Trump’s birthday is on the 14th). This was not cited by brokers as a major market-moving factor, though it probably should have been. The planning of the trip significantly increases the likelihood of a deal between the two leaders of the world’s largest economies.
Online recruitment platform Kanzhun reported Q4 earnings overnight. The company’s revenue of $1.8 billion beat expectations handily. Meanwhile, its monthly active users increased by +28% year-over-year. Management’s guidance was also quite strong. Kanzhun operated the popular app “BOSS Zhipin”, which can be thought of as the “Indeed” of China due to its status as a top job-seeking platform. Employment is being highlighted by policymakers as a priority in 2025 at the National People’s Congress (NPC), and the platform is a beneficiary. This likely led to management’s cheery outlook that was better than expected, as well.
China’s government bonds continued to sell off overnight. This is a good sign as investors are shifting to stocks!
The electric vehicle ecosystem rebounded overnight after Tesla slumped yesterday. Xpeng gained +9.8% after announcing yesterday that its flying cars, or at least a prototype, could become available next year. BYD’s unit sales set a new record in February, sending its shares higher by +1.33% in Hong Kong overnight.
The Hang Seng and Hang Seng Tech indexes diverged to close -0.01% and +1.39%, respectively, on volume that increased by +2% from yesterday. Mainland investors sold a net -$520 million worth of Hong Kong-listed stocks and ETFs via Southbound Stock Connect. The top-performing sectors were Consumer Staples, which gained +2.82%, Health Care, which gained +2.07%, and Information Technology, which gained +1.58%. Meanwhile, the worst-performing sectors were Materials, which fell -2.33%, Real Estate, which fell -0.39%, and Financials, which fell -0.32%.
Shanghai, Shenzhen, and the STAR Board diverged to close +0.41%, +0.34%, and -0.40%, respectively. The top-performing sectors were Consumer Staples, which gained +2.47%, Materials, which gained +1.09%, and Financials, which gained +0.96%. Meanwhile, the worst-performing sectors were Information Technology, which fell -0.12%, Real Estate, which gained +0.02%, and Consumer Discretionary, which gained +0.14%.
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Last Night’s Performance
Last Night’s Exchange Rates, Prices, & Yields
- CNY per USD 7.23 versus 7.26 yesterday
- CNY per EUR 7.90 versus 7.86 yesterday
- Yield on 10-Year Government Bond 1.89% versus 1.81% yesterday
- Yield on 10-Year China Development Bank Bond 1.91% versus 1.84% yesterday
- Copper Price +0.96%
- Steel Price +0.44%
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