CSI Ticks Lower, Monday’s YtD Low Not Challenged

The benchmark CSI 300 index finished off worst levels (-0.2%) after trading below unchanged levels for the duration of Tuesday trade.

• Monday’s ’23 low in the index wasn’t challenged, trading above 3,700.
• Sunac shares benefitted from widespread creditor approval re: the vote covering the company’s offshore debt restructuring plan.
• Still, property sector worry remains evident. Newswire headlines have recently pointed to offshore Country Garden debtholders not receiving an interest payment that was due Monday. The payment has a 30-day grace period. This comes after reports suggested that the name got creditor approval to extend repayment terms for 9 bonds, along with a credit enhancement.
• Semiconductors leant on a JPM report pointing to the potential for solid Android phone demand.
• UBS suggested that the Chinese equity markets may have based but cautioned that that it could take time for positive sentiment to return.
• Meanwhile, Blackrock downgraded Chinese stocks to neutral from overweight, flagging headwinds for the property sector and expectations re: a limited economic boost from stimulus measures.
• The CSRC noted it plans to further strengthen regulations on companies that pay little or no dividends and increase restrictions on those that pay dividends beyond their capacity.
• Flow-wise, HK-China Stock Connect schemes saw a net CNY2.4bn of outflows from mainland shares, reverting to net selling after Monday’s round of net purchases broke a 4-day stretch of outflows.