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China And HK Equities Mixed, China PMIs Higher For 2nd Month

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Hong Kong and China equities are mixed today, with Hong Kong equities continuing their outperformance, after China announced measures to support the HK market. China equities have displayed a subdued response to the consecutive increase in factory activity for the second month, suggesting that the country's economic recovery could still have legs. The HSI has outperformed the CSI300 over the past month by 3.89% and 6.26% since the announcement. Positive property markets headlines out over the weekend saw property indices surge on Monday with many now entering bull markets. Earlier China PMI data was out with a positive print in manufacturing PMI, the gauge now in the second month of expansion although services slowed from the previous month and came in below expectations.

  • Hong Kong equities are slightly higher today with the HSTech Index little changed after breaking back above the 200-day EMA and is now up 14.5% from lows on the Apr 19th. The Mainland Property Index surged higher on Monday after positive headlines over the weekend, finishing the day up 3.35%, we a touch lower today down 0.35% while the wider the HSI is up just 0.10%. China Mainland equities have again underperformed today , with the CSI300 down 0.35%, although the index was able to closed above the 200-day EMA for the first time since August 2023, small-cap indices are performing the lower today with the CSI1000 and CSI2000 both down about 0 .90%, while the ChiNext is giving back some of Mondays gains, down 1.25%
  • China Northbound had another double digit inflow of 11b yuan on Monday. The past 5-days saw just a single day of outflows, with a total inflow of 35b yuan. The 5-day average at 7.05billion, while the 20-day average sits at 0.48billion yuan.
  • Property Indices surged on Monday after broader market rally, and as expectations of further easing of home purchase restrictions grow following a major city’s relaxation, with headlines such as "CHINA'S CHENGDU WILL NO LONGER REVIEW HOME BUYING QUALIFICATION" & "CHINA'S CHENGDU RELAXES HOME-BUYING RULES IN BOOST TO MARKET" - BBG helping push markets higher. While CIFI has reached an agreement with creditors to restructure its debt, potentially reducing principal by up to 85%. The proposal involves swapping existing debt for new notes and saw CIFI's shares surge 28% in Hong Kong trading. The Mainland Property Index was up as much as 5.8% at one stage on Monday finishing the session up 3.35%
  • Dividend payouts by China's A-share listed companies for 2023 are poised to reach a record high, with 3,800 out of 5,160 companies having currently released annual reports and have planned to distribute 2.2 trillion yuan ($304 billion). The banking, telecommunications, and oil and coal sectors are among those with the largest dividend plans.
  • Earlier, Composite PMI was 51.7, down from 52.7 in March, Manufacturing PMI was 50.4 vs 50.3 est, while Caixin China PMI Mfg was 51.4 vs 51.0 est and up from 51.1 in March.
  • Looking forward, Hong Kong GDP on Thursday
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Hong Kong and China equities are mixed today, with Hong Kong equities continuing their outperformance, after China announced measures to support the HK market. China equities have displayed a subdued response to the consecutive increase in factory activity for the second month, suggesting that the country's economic recovery could still have legs. The HSI has outperformed the CSI300 over the past month by 3.89% and 6.26% since the announcement. Positive property markets headlines out over the weekend saw property indices surge on Monday with many now entering bull markets. Earlier China PMI data was out with a positive print in manufacturing PMI, the gauge now in the second month of expansion although services slowed from the previous month and came in below expectations.

  • Hong Kong equities are slightly higher today with the HSTech Index little changed after breaking back above the 200-day EMA and is now up 14.5% from lows on the Apr 19th. The Mainland Property Index surged higher on Monday after positive headlines over the weekend, finishing the day up 3.35%, we a touch lower today down 0.35% while the wider the HSI is up just 0.10%. China Mainland equities have again underperformed today , with the CSI300 down 0.35%, although the index was able to closed above the 200-day EMA for the first time since August 2023, small-cap indices are performing the lower today with the CSI1000 and CSI2000 both down about 0 .90%, while the ChiNext is giving back some of Mondays gains, down 1.25%
  • China Northbound had another double digit inflow of 11b yuan on Monday. The past 5-days saw just a single day of outflows, with a total inflow of 35b yuan. The 5-day average at 7.05billion, while the 20-day average sits at 0.48billion yuan.
  • Property Indices surged on Monday after broader market rally, and as expectations of further easing of home purchase restrictions grow following a major city’s relaxation, with headlines such as "CHINA'S CHENGDU WILL NO LONGER REVIEW HOME BUYING QUALIFICATION" & "CHINA'S CHENGDU RELAXES HOME-BUYING RULES IN BOOST TO MARKET" - BBG helping push markets higher. While CIFI has reached an agreement with creditors to restructure its debt, potentially reducing principal by up to 85%. The proposal involves swapping existing debt for new notes and saw CIFI's shares surge 28% in Hong Kong trading. The Mainland Property Index was up as much as 5.8% at one stage on Monday finishing the session up 3.35%
  • Dividend payouts by China's A-share listed companies for 2023 are poised to reach a record high, with 3,800 out of 5,160 companies having currently released annual reports and have planned to distribute 2.2 trillion yuan ($304 billion). The banking, telecommunications, and oil and coal sectors are among those with the largest dividend plans.
  • Earlier, Composite PMI was 51.7, down from 52.7 in March, Manufacturing PMI was 50.4 vs 50.3 est, while Caixin China PMI Mfg was 51.4 vs 51.0 est and up from 51.1 in March.
  • Looking forward, Hong Kong GDP on Thursday