US Rate Hike Fears Mean Risk Off, Investors Await More Support

China Last NightKraneShares
Week in Review

Asian equities had a principally constructive week apart from final evening on a number of earnings releases together with from Nvidia, which lifted semiconductor shares.
NetEase, Kuaishou, and Baidu all reported Q2 earnings this week with combined however principally constructive outcomes as promoting and sport revenues come again in drive.
US Commerce Secretary Gina Raimondo ready for her journey to China, which begins this weekend, by assembly with China’s Ambassador to the US, who urged cooperation and a constructive US-China relationship.
Foreign outflows from Mainland shares through Northbound Stock Connect made a U-turn on Thursday after two weeks of straight web promoting.

Friday’s Key News
Asian equities ended the week with a thud aside from Singapore and Thailand, which each managed small beneficial properties.

Technology, development shares, and development sectors have been hit the toughest on US fee hike fears because the US greenback strengthened in a single day. Meanwhile, Hong Kong’s fall immediately erased the week’s achieve, sadly.

Meituan’s monetary outcomes beat expectations however have been overshadowed by a cautious Q3 outlook and feedback through the Q&A, which despatched the inventory decrease by -5.57% and weighed on Hong Kong-listed web names.
Volumes have been gentle, which has added to the volatility and the market’s decline. Meanwhile, adverse media consideration on China’s economic system has solely exacerbated volatility, to the delight of Hong Kong shorts, who’ve pressed their bets as Main Board quick turnover reached 20% or extra for the fifth time this month.

I just lately returned from a enterprise journey in Asia. My interactions with traders on this journey, together with previous worldwide and home journeys, made me notice that they’re universally and severely obese US shares and underweight non-US equities, together with China. With no patrons, shorts can push the shares decrease. Why are there no patrons? Stimulus, market reforms, and fee cuts have been carried out incrementally, however we’ve not seen the preverbal “bazooka” and traders proceed to ask ”the place’s the meat?”.

Why have we not seen such robust stimulus? China’s economic system isn’t doing as badly because the headlines counsel. Investors and Chinese shoppers want to see widespread launch of spending vouchers to leap begin home consumption. Yes, actual property is problematic, however will it trigger China’s “Lehman second”? That is unlikely given the eye the sector is receiving from regulators although a silver bullet resolution isn’t going to happen in a single day. We have lengthy talked about actual property points will proceed to flare as distressed gamers run into points.

Ironically, actual property was the most effective performing sector in a single day in Hong Kong and Mainland China as reforms introduced in a single day included the elimination of second house buy restrictions for owners with present mortgages.
Mainland water business shares rose as Japan releases handled water from the Fukushima nuclear plant, prompting a Chinese ban on Japanese fish.
Mainland shares have slid by assist ranges of three,200 on the Shanghai and a couple of,000 on the Shenzhen this month, regardless of market reforms and assist. Contrarians ought to word The Economist’s adverse China cowl, which has a horrific observe report.
US Commerce Secretary Gina Raimondo will start her journey to China this weekend as US-China diplomatic inexperienced shoots proceed.
The Hang Seng and Hang Seng Tech indexes fell -1.4% and -2.38%, respectively, on quantity that decreased -19.85% from yesterday, which is 71% of the 1-year common. 185 shares superior whereas 295 shares declined. Main Board quick promoting declined -7.01% from yesterday, which is 83% of the 1-year common as 20% of turnover was quick turnover. The worth issue “outperformed” i.e. fell lower than, the expansion issue whereas small caps “outperformed” massive caps. The top-performing sectors have been actual property, which gained +0.99%, financials, which gained +0.51%, and supplies, which gained +0.21%. Meanwhile, utilities fell -2.74%, client discretionary fell -2.48%, and communication companies fell -2.33%. The top-performing subsectors have been family merchandise, diversified financials, and banks. Meanwhile, media, retail, and meals (client staples) have been among the many worst. Southbound Stock Connect volumes have been gentle as mainland traders bought a web -$287 million price of Hong Kong-listed ETFs and shares as Meituan was a big web purchase, power big CNOOC was a small/reasonable web purchase, and Tencent and Kuaishou have been each small web sells.
Shanghai, Shenzhen, and the STAR Board all fell by -0.59%, -1.49%, and -1.70%, respectively, on quantity that decreased -2.55% from yesterday, which is 87% of the 1-year common. 995 shares superior whereas 3,706 shares declined. The worth issue outperformed the expansion issue as massive caps “outperformed” i.e. fell lower than small caps. The top-performing sectors have been actual property, which gained +1.77%, utilities, which gained +0.95%, and financials, which gained +0.56%. Meanwhile, expertise fell -2.86%, communication companies fell -2.59%, and client discretionary fell -1.31%. The top-performing subsectors have been the water business, actual property, and insurance coverage. Meanwhile, pc {hardware}, software program, and web have been among the many worst. Northbound Stock Connect volumes have been gentle as international traders bought a web -$329 million price of Mainland shares as Kweichow Moutai, Wuxi Apptec, and Citic have been all small web sells.
We misplaced certainly one of our household canine as Murphy succumbed to a sudden sickness. He was canine that will probably be missed regardless of his unimaginable observe report of barking throughout my video calls.
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Last Night’s PerformanceCountry/Index performanceKraneSharesMSCI China All Shares IndexKraneSharesStock performanceKraneSharesHong Kong Top 10KraneSharesChina Top 10KraneShares
Last Night’s Exchange Rates, Prices, & Yields

CNY per USD 7.28 versus 7.28 yesterday
CNY per EUR 7.88 versus 7.87 yesterday
Yield on 1-Day Government Bond 1.50% versus 1.45% yesterday
Yield on 10-Year Government Bond 2.57% versus 2.55% yesterday
Yield on 10-Year China Development Bank Bond 2.67% versus 2.66% yesterday
Copper Price -0.38% in a single day
Steel Price -0.56% in a single day

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