Asian equities had a mixed week, with markets in Hong Kong, Taiwan, and Japan performing well, while the Philippines and Malaysia saw declines. Hong Kong stocks surged after reports that Mainland investors would no longer have to pay a 20% dividend tax on Hong Kong-listed stocks, leading to increased buying activity. Real estate was the top-performing sector in China, following the removal of home purchase restrictions in Xi’an and Hangzhou. The Hang Seng Index broke through a resistance level, closing just below 19,000, while the Hang Seng Tech Index approached a resistance level of 4,000.
Mainland China saw mixed performance, with growth stocks underperforming value stocks. Foreign investors sold a net -$832 million worth of Mainland stocks, contributing to weakness in growth stocks. Concerns were raised over Biden’s upcoming tariff announcement on China-made electric vehicles and solar panels, which is seen as a symbolic move aimed at certain swing states. Despite this, Chinese automaker Geely is pursuing an IPO of its Zeekr EV brand on the NYSE, indicating strong business ties between the US and China. The Hang Seng and Hang Seng Tech indexes saw gains, with strong performance in the Real Estate, Financials, and Energy sectors.
In Hong Kong, the Hang Seng and Hang Seng Tech indexes experienced gains, with increased volume and positive performance across all sectors. Real Estate, Financials, and Energy were the top-performing sectors, while the value factor and large caps outpaced growth factors and small caps. Southbound Stock Connect saw high volumes, with Mainland investors buying a healthy net amount of Hong Kong-listed stocks and ETFs. Meanwhile, in Mainland China, Shanghai, Shenzhen, and STAR Board had mixed performance, with Real Estate, Financials, and Utilities sectors leading gains.
An upcoming webinar will explore whether AI is the next great catalyst for emerging markets, providing insight into the potential impact of artificial intelligence on investment opportunities. Recent content on China’s stock market rally highlights five reasons why this rally may be fundamentally different from previous trends. Exchange rates, prices, and yields showed slight fluctuations, with the CNY per USD at 7.23 and the yield on 10-Year Government Bond at 2.31%. Copper prices rose, while steel prices fell. Overall, the market outlook remains positive, with continued interest in emerging market opportunities and potential catalysts for growth.
