The Deputy Prime Minister attends an online meeting, JD Earnings has exceeded expectations

The Deputy Prime Minister attends an online meeting, JD Earnings has exceeded expectations


Key news

Asian stocks had a strong session overnight as all markets were in the green and Hong Kong and India outperformed.

Hong Kong Internet Shares experienced a strong day following the participation of Deputy Prime Minister Liu Hea at the CPPCC meeting with Internet companies entitled “Promoting the Sustainable and Healthy Development of the Digital Economy”. His attendance at the meeting could indicate that China’s Internet regulatory cycle has officially ended. The ten most traded Hong Kong shares include Tencent, which gained + 5.26%, Meituan, which gained + 6.24%, Alibaba HK, which gained + 7.03%, JD.com HK, which gained + 7.4%, and Kuaishou, who gained + 4.97%.

Yesterday, JP Morgan updated its price targets and outlook for Chinese online stocks.

Following the US closure, Tencent Music Entertainment (TME US) announced decent / mixed results.

In contrast, JD.com (JD US, 9618 HK) reported post-Hong Kong / pre-market results in Hong Kong that exceeded expectations. The first quarter was a fantastic quarter for the e-commerce company. Both Tencent Music Entertainment (TME) and JD have seen brief interest, which is 3 times the annual average daily volume, which should provide a healthy dose of short coverage.

We would like to see stronger volumes in Hong Kong and the mainland on growth day than we do today, even if we take it. Remember that China and Internet names are heavily underrated by investors. Hopefully we will see an active emerging market and global managers returning to names.

It is also worth noting the strong performance of shares of the ecosystem of solar and electric vehicles (EV) in China, as the largest volume of shares was BYD + 5.76%, Tianqi Lithium + 5.01%, battery maker for electric vehicles CATL + 3.82% and Gangfeng Lithium + 8.98%.

Hang Seng and Hang Seng Tech gained + 3.27% and + 5.78% in the volume, which increased by + 33% compared to yesterday, 86% of the annual average. 407 shares advanced, while 79 closed lower. The volume of short sales in Hong Kong has increased by 21% since yesterday, which is 94% of the 1-year average. Overnight growth factors significantly outperformed value factors. All sectors were green, led by growth sectors such as technology + 6.27%, discretionary + 6.14% and communications + 5.37%. Apple’s suppliers and ecosystem of clean technologies, such as electric car and battery manufacturers, and Internet stocks had a strong day. Southbound stock volumes increased as mainland investors were net buyers of Hong Kong stocks as Meituan recorded a strong inflow, while, interestingly, Tencent was a small net sale.

Shanghai, Shenzhen and STAR Board have gained + 0.65%, + 0.73% and + 1.39% to + 0.39% in volume since yesterday, which is 73% of the 1-year average. Interestingly, 1,512 shares advanced, while 2,739 shares fell. Large companies and growth factors outperformed value and dividend factors. All sectors were green as technology + 3.82%, discretionary + 3.34% and materials + 3.17%. The EV ecosystem and solar stocks had a strong day. Today, foreign investors bought mainland stocks for $ 885 million through Northbound Stock Connect. Government bonds sold, CNY gained + 0.91% against the US dollar, and copper rose + 0.75%.

Last night exchange rates, prices and yields

  • CNY / USD 6.73 vs. 6.79 yesterday
  • CNY / EUR 7.09 vs. 7.08 yesterday
  • The yield on the 10-year government bond was 2.82% compared to 2.82% yesterday
  • Yield on 10-year China Development Bank bonds 3.00% compared to 3.01% yesterday
  • Copper price + 0.75% overnight

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