HK & China Equities Mixed, Tech Higher On Apple Court Request

Hong Kong and China equity markets are mixed today, with HK equities outperforming. Tech and property names have been the focus again today, with tech names are rising following a report that Apple is seeking to modify a Chinese court ruling in its favor. This potential boost in Apple phone sales in China is expected to benefit suppliers and enhance investor sentiment in the region, while property names are higher following data showing the top 100 developers saw sales increased m/m, although are still down y/y. Earlier, China Caixin services PMI came in at 51.2 vs 53.4 est, and down from 54.00 prior, although the headline index is still in expansion territory but back near Oct 2023 levels.

• Hong Kong equities are higher today, property names are the top performing with the Mainland Property Index up 3.45% and the HS Property Index up 2.37%, elsewhere the HSTech Index is up 2.51% and the wider HSI is trading 1.18% higher.
• China equity markets are mostly lower today, although similar to HK markets the property market is the top performing with the CSI 300 Real Estate Index up 2.08%, small-caps are well off their earlier lows with the CSI 2000 down 0.37% and the CSI 2000 down 0.12% at the break, while the wider CSI 300 is down 0.14%.
• Property sales from the top 100 developers increased m/m, although still sit 17% lower y/y. Earlier, China Vanke home sales growth stalled in June, with a 7.9% month-on-month increase, down from 12% in May and 31% lower annually. While Vanke's performance lags behind the 36% m/m rise seen among the top 100 real estate companies, the firm is relying on a sales revival to address its liquidity issues amidst a mixed housing market recovery following a government rescue package.
• Hedge fund exposure to Chinese stocks is near multi-year lows, with global hedge funds being net sellers for the third time in four months, and mutual funds' allocations at their lowest in a decade. This reflects concerns that Beijing will not implement aggressive pro-growth policies, especially with low expectations for the upcoming Third Plenum meeting. Local investors are skeptical about policy effectiveness, despite recent strategies to address property sector issues as per BBG.
• Apple is seeking to have a Chinese court alter its written ruling in a lawsuit the company won, aiming to remove references to its "dominant position" and "unfair pricing" that could affect future regulatory scrutiny. This move underscores Apple's delicate position in China, its largest international market, as it faces competition from Huawei and regulatory challenges globally over its app store fees., as per BBG.
• Looking ahead, we have S&P Global Hong Kong PMI on Thursday