Heavy End to The Week

Chinese equity benchmarks struggled ahead of the weekend, with the CSI 300 -1.0% and the Hang Seng -2.2%.

• Weakness in the yuan was noted (more on that elsewhere)
• SMIC shares traded heavily after the Biden administration said that the company may have violated U.S. export rules, although an evaluation of the situation is ongoing.
• Also note that a new bill in US congress aims to ban mutual funds from investing in some products that track Chinese stock indices. The bill still has plenty of hurdles to clear before it becomes law.
• Various names struggled in the wake of earnings (Longfor, CK Hutchinson, CNOOC, Li Auto, Ping An).
• News that Samsonite are looking for a secondary listing venue weighed on the name, with that seen as a deterrent for potential buyers.
• After hours saw Meituan Q4 revenue and profit beat exp.
• We have also seen policymakers try to play down FDI fluctuations and point to strong economic fundamentals, while there is continued focus on promoting long term capital deployment from market regulators. Nothing new in those comments that attempt to improve economic/market confidence.
• HK-China Stock Connect links generated net outflows from the mainland for a second consecutive day (CNY3.1bn). That resulted in net outflows for the week via those channels (CNY7.8bn), although net inflows are still seen month-to-date (CNY16.6).