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China & HK Equities Higher, ETF Buying Surges, PMI Contracts

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China & Hong Kong equities are higher today, with tech and financials leading the way, major benchmarks are up over 2% supported by aggressive ETF buying and optimistic expectations for stronger support measures from Beijing, despite the third consecutive month of manufacturing contraction. Investors are anticipating policy easing following the Politburo meeting's focus on boosting consumer spending and counter-cyclical adjustments.

  • Hong Kong equities are higher today, the HSTech Index is up 3.15%, while Real Estate Indices are trading well (Mainland +2.15%, HS Property +1.80%) the broader HSI is 2% higher while the HS China Enterprise Index is performing slightly better, up 2.25%.
  • China benchmark indices have seen aggressive ETF buying from state-related fund manager. Small-caps are again the best performers with the CSI 1000 up 3.25%, while the CSI 2000 is 2.75% The CSI 300 Real Estate Index is up 3.75% as Chinese Developers Shimao & Times China head to court today to show they have made progress on their restructures, the broader CSI 300 is 1.90% higher.
  • China's manufacturing PMI remained in contraction for the third consecutive month in July at 49.4, reflecting ongoing weak domestic demand and economic concerns. The non-manufacturing PMI also dropped to 50.2, indicating slower growth in the service and construction sectors. Despite efforts to boost economic activity, the outlook remains uncertain without significant fiscal policy changes.
  • Investors in China have poured over $20b into the A-share market through ETFs in July, anticipating a rebound driven by potential monetary easing, according to a Shanghai Securities News report. Institutional investors are the primary buyers, with transactions of equity ETFs, particularly those tracking broad-based indexes surging recently, while this surge can also be attributed to China National Team.
  • Chinese developers Shimao and Times China are in Hong Kong court seeking to demonstrate sufficient progress on debt restructuring to avoid liquidation. Both have been negotiating with creditors, with Shimao revising its debt terms and Times China reaching an agreement in principle with key creditors, per BBG.
  • Later today we have Hong Kong GDP & Money Supply, while tomorrow we have Caixin China PMI Mfg & Hong Kong Retail Sales
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China & Hong Kong equities are higher today, with tech and financials leading the way, major benchmarks are up over 2% supported by aggressive ETF buying and optimistic expectations for stronger support measures from Beijing, despite the third consecutive month of manufacturing contraction. Investors are anticipating policy easing following the Politburo meeting's focus on boosting consumer spending and counter-cyclical adjustments.

  • Hong Kong equities are higher today, the HSTech Index is up 3.15%, while Real Estate Indices are trading well (Mainland +2.15%, HS Property +1.80%) the broader HSI is 2% higher while the HS China Enterprise Index is performing slightly better, up 2.25%.
  • China benchmark indices have seen aggressive ETF buying from state-related fund manager. Small-caps are again the best performers with the CSI 1000 up 3.25%, while the CSI 2000 is 2.75% The CSI 300 Real Estate Index is up 3.75% as Chinese Developers Shimao & Times China head to court today to show they have made progress on their restructures, the broader CSI 300 is 1.90% higher.
  • China's manufacturing PMI remained in contraction for the third consecutive month in July at 49.4, reflecting ongoing weak domestic demand and economic concerns. The non-manufacturing PMI also dropped to 50.2, indicating slower growth in the service and construction sectors. Despite efforts to boost economic activity, the outlook remains uncertain without significant fiscal policy changes.
  • Investors in China have poured over $20b into the A-share market through ETFs in July, anticipating a rebound driven by potential monetary easing, according to a Shanghai Securities News report. Institutional investors are the primary buyers, with transactions of equity ETFs, particularly those tracking broad-based indexes surging recently, while this surge can also be attributed to China National Team.
  • Chinese developers Shimao and Times China are in Hong Kong court seeking to demonstrate sufficient progress on debt restructuring to avoid liquidation. Both have been negotiating with creditors, with Shimao revising its debt terms and Times China reaching an agreement in principle with key creditors, per BBG.
  • Later today we have Hong Kong GDP & Money Supply, while tomorrow we have Caixin China PMI Mfg & Hong Kong Retail Sales