In the Asian equities market, Hong Kong and Singapore outperformed while Mainland China saw a decline. Hong Kong-listed growth and technology stocks showed strong performance, with Tencent, Meituan, Alibaba, Bank of China, and Hong Kong Exchanges leading the gains. The China Securities Regulatory Commission expressed support for Hong Kong as a financial hub, while UBS upgraded China to overweight with a focus on internet and consumer stocks. Goldman Sachs discussed the potential for a “re-rating” of Chinese equities following the release of the “Nine Opinions” by the Chinese government.
Despite headlines about the US government considering sanctions on Chinese banks, the market showed resilience as Chinese banks had previously taken steps to avoid aiding Russia. The passing of a bill including a TikTok ban and the IPO of Sichuan Baicha did not have a significant impact on the market. Mainland China saw a decline in foreign investor activity, with net selling of stocks, while Hong Kong saw moderate buying from Mainland investors through the Southbound Stock Connect. Japanese stocks benefited from government purchases of Japanese equity ETFs and corporate governance reforms.
The “Nine Opinions” released by the State Council of China emphasized the strengthening of supervision in the capital market, including measures to increase dividend rates and encourage share repurchases. Mainland China saw significant equity ETF buying by China’s sovereign wealth fund in the first quarter of 2024. The Hang Seng and Hang Seng Tech indexes in Hong Kong posted gains, with the top-performing sectors including Communication Services and Consumer Discretionary. Mainland China saw declines in the Shanghai, Shenzhen, and STAR Board indexes, with negative performance in all sectors except for Consumer Staples and Health Care.
Investors can join a Quadratic Capital webinar on the normalization of markets on April 24th. Topics covered will include market trends and strategies amid changing conditions. The latest article on the China Market Connect in March 2024 is also available for reading. Exchange rates, prices, and yields showed fluctuations, with the CNY slightly down against the USD and EUR, while the yield on government bonds and China Development Bank bonds saw slight declines. Commodity prices for copper and steel also fell. Overall, the Asian equities market continues to show mixed performance, with various factors impacting investor sentiment and market movements.
