Benchmarks Lower, Mixed Sector Performance

Benchmark indices were a little lower on Thursday, CSI 300 -0.3% & the Hang Seng -0.7%.

• Names linked to TikTok struggled on U.S. legal action against the app.
• AIA was lower in HK post-earnings.
• Not all sectors were lower.
• Property developers benefitted from Hangzhou relaxing property buying restrictions.
• Speculation surrounding government support was said to help pharmaceuticals.
• Names linked to equipment manufacturing also benefitted from deeper policy support.
• Zooming out, discussions surrounding further monetary easing continue. Our policy team’s latest interview with a senior policy advisor highlighted the need for further rate cuts.
• The advisor also flagged downside risks to this year’s annual economic growth target, stressing the need for local governments to increase land revenue.
• HK-China Stock Connect flows provided ~CNY6.4bn of net mainland inflows.
• While offshore sentiment re: Chinese stocks has recovered a little in recent weeks, mainland reports point to a preference for bonds over stocks amongst local investors.
• Similarly, QDII demand has been flagged, pointing to strong demand for offshore investment in China, triggering tighter restrictions surrounding the size of related outflows.