Internet stocks boom on Friday night in Hong Kong, a look back at this week

1 week review

• Asian stocks mostly rose this week as some markets returned online from the Lunar New Year, but mainland China remains closed and is expected to reopen on Monday.
• Hong Kong registered its third consecutive day of victories after reopening on Wednesday following positive policy developments leading to growing confidence that China will stimulate the economy and markets.
• Year-end and New Year travel has increased significantly since last year, with the China Tourism Research Institute predicting that tourism spending in 2024 will increase by 22% compared to the previous year.
• Taiwan has come back from the Lunar New Year holiday in good spirits after an analyst upgrade of Taiwan Semiconductor Manufacturing Company (TSMC).

Friday’s important news

Asian stocks ended a solid week with impressive gains led by growth and tech stocks, following Applied Materials’ results released after the US close yesterday.

Hong Kong had a good day with 490 stocks gaining and only 17 stocks declining. This was led by the most traded stocks based on price increases. Tencent up +2.24%, Alibaba up +2.38% on hedge fund Q4 report, Meituan up +4.63% after yesterday’s strong sales announcement, AIA +1.58%, BYD in Mexico The stock rose +3.88% on reports that it will build a factory. Remember, BYD is a hybrid electric vehicle giant and not just his EV business.

Wuxi Biologics rose +12.06% and Wuxi AppTec +4.48%, despite a US Congressman accusing both companies of collaborating with the Chinese military. Both companies submitted to the Hong Kong Stock Exchange that the allegations were false.

UnionPay, China’s only domestic credit card payment processor, reported online payment transactions for the first six days of the Chinese New Year holiday. Transaction value was $15.38 billion, an increase of +15.8% year-on-year, and transaction value was RMB7.74 trillion, an increase of +10.1% year-on-year. The payments company reported that consumption sectors such as restaurants, accommodation, tourism, and retail all saw increases of more than +20% year-on-year.

The Hong Kong government reported that there were 4 million inbound trips by 750,000 visitors during the first four days of the New Year holiday, of which 650,000 were from China. Trading volumes increased significantly in Hong Kong, increasing by +50% from yesterday, but the average for the year was only 71%.

The real estate sector was the top performer following yesterday’s news that major Chinese banks will support projects with loans. Meanwhile, the Wall Street Journal published an article stating that the government plans to purchase apartments from distressed real estate developers and use them as subsidized housing. We will wait and see, but I would recommend giving the apartment to a family who agrees to have two or more children. Real estate was also helped by Longfor Group, +10.22% after the court granted more time to rebuild.

After the close, the Hang Seng Index is committee-driven rather than purely quantitatively driven, and no new constituents were added to the Hang Seng Index, which restrains Xiaopeng, which rose +5.93%, and Prada, which rose +3.62%. there is a possibility. . Many thought these names would be added to the benchmark.

There was a fair amount of talk throughout the night about hedge funds and some reputable financial institutions buying Chinese stocks. While this is true, the fact that hedge funds can hedge long positions may have protected them from the January downdraft caused by the forced liquidation of contracts in China due to a lack of buyers. Don’t forget. After the forced liquidation, it has taken a more constructive stance towards the Chinese market, taking into account increased real estate policy support.

There was also talk overnight that China’s central bank, the People’s Bank of China, may lower medium-term lending facility (MLF) interest rates on Sunday night.

The Financial Times had another article about the growth in the AUM of certain emerging market China ETFs. Do you think investors are poised for a rally? Me too!

The Hang Seng Index and the Hang Seng Tech Index have increased +2.48% and +3.71%, respectively, with volume increasing +50.28% from yesterday, which corresponds to 71% of the one-year average. 490 stocks rose in price and 17 stocks fell. Mainboard short volume increased +37% from yesterday. This corresponds to an average of 62% over the past year, as 15% of the volume was short volume (Hong Kong’s short volume includes the ETF short volume driven by the market maker’s ETFs). Remember that there is a hedge). Growth factors and small-cap stocks outperformed value factors and large-cap stocks. All sectors were positive, led by real estate, which rose +7.23%, healthcare, which rose +5.53%, and consumer staples, which rose +4.90%. All sub-sectors also performed well, led by media, food, retail and pharmaceuticals. Southbound Stock Connect has been closed.

Shanghai, Shenzhen and STAR board meetings were closed overnight.

last night’s performance

Last night’s exchange rates, prices and yields

The mainland’s bond and currency markets were closed last night.

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