China & HK Equities Mixed, CSRC Announcement Helping HK Equities

Hong Kong and China equity are mixed today, with Hong Kong equities outperforming again today after the CSRC announced five measures to promote Chinese companies listing in Hong Kong with companies expected to shift their fundraising plans to Hong Kong following recent tightening of domestic listing rules. China’s CB to further lower its MLF rates to help reduce financing cost for the economy, according to analysts.

• Hong Kong equities are surging higher today with the HSTech Index up 2.85% and now testing both the 20 & 50-day EMAs, while the 14-day RSI has ticked into positive territory at 50, the Mainland Property Index up 1.17% however still remains below all EMA's and 14-day RSI is below 50 although it's ticking higher, while the HSI is up 1.64% and has now broken back above 100-day EMA with a potential move to the 200-day EMA at 17,266. China Mainland equities are underperforming this morning, with the CSI300 down 0.56% and now testing the 50 & 100-day EMA, levels we have remained above since mid Feb, a break below here could signal a further leg down and a test of the 3,400 level. Small-cap indices are mixed with the CSI1000 down 0.50% while the CSI2000 is up 0.60%.
• China Northbound had an inflow of 1.4b yuan on Thursday, momentum has been decreasing over the past week with the 5-day average at -2.68billion, while the 20-day average sits at -1.28billion yuan.
• Analysts suggest that China's central bank may lower its medium-term lending facility (MLF) rates in the third quarter to reduce financing costs for the economy. This move could also lead to a decrease in banks' loan prime rates and help address local debt risks, according to experts cited by the China Securities Journal. However, there are concerns about the shrinking room for further reduction in loan prime rates due to pressure on banks' net interest margins caused by declining lending rates
• Recent measures by China's securities regulator to support IPOs in Hong Kong are expected to lead mainland firms to shift their fundraising plans to the city, bolstering its status as a premier listing destination. The move follows tightening regulations on domestic listings and aims to enhance connectivity between Hong Kong and mainland capital markets, although the impact may not be immediate due to ongoing global uncertainties.
• Looking ahead, HK CPI Composite later today & Trade Balance on Thursday, while the calendar for China remains quiet.