Hong Kong & China Equities Mixed, TSMC To Report Later

Hong Kong and China equity are mixed lower today, Moody's has downgraded China Oversea Land to Baa2, the UK is looking at imposing new restrictions on AI technology on countries like Russian and China. Some Chinese companies have revised down earnings due to tighter regulations, Taiwan Semiconductor Manufacturing Co will released earnings later today.

• Hong Kong equities have recovered from their opening levels with the Mainland Property Index now unchanged after opening 0.80% lower, the HSTech Index is down 0.40% there will be focus on TSMC earnings due out later today, while the wider HSI is now up 0.15%. In China, equities are trading slightly lower, the CSI300 is down 0.20%, while smaller-cap CSI 2000 is off 0.30%, now back at pre CSRS report levels.
• China Northbound saw an outflow of 0.23b on Wednesday, with the 5-day average at -0.05billion, while the 20-day average sits at -0.11billion yuan.
• In the property space, Moody's downgraded China Overseas Land's long-term rating to Baa2 from Baa1, with the outlook revised to stable from negative. The downgrade reflects concerns that COLI's credit metrics may not recover amid the extended downturn in China's property market. However, the outlook indicates expectations that COLI will maintain strong contracted sales performance and stabilize its credit metrics with robust liquidity over the next 6-12 months.
• The UK is considering imposing new restrictions on outward investments in emerging technologies like artificial intelligence and semiconductors, aiming to mitigate security risks associated with aiding adversarial states like Russia and China. Deputy Prime Minister Oliver Dowden plans to collaborate with G7 nations to assess these risks and explore the possibility of additional regulations, particularly in sectors crucial for national security.
• A group of A-share listed companies in China have adjusted their 2023 annual earnings estimates, a step likely taken to prevent potential delisting penalties for falsifying financial records, reports the official Shanghai Securities News. According to exchange filings, 35 companies have revised their initial earnings projections, with 31 of them lowering their estimates, including three shifting from profits to losses, with analysts attributing these adjustments to recent stricter regulations, particularly concerning accounting fraud.
• Looking ahead, Hong Kong has Unemployment data later today, while China's 1 & 5 yr LPR on Monday is the next focus