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Hong Kong Equities Continue To Outperform Post CSRC Announcement

ASIA STOCKS

Hong Kong and China equity are mostly higher today, with Hong Kong equities continuing their recent outperformance and the HSI now trades unchanged for the year and has now outperformed the CSI300 by 4.83% over the past month with all that move coming since Friday when the CSRC announced measures to support the Hong Kong market. Chinese companies have been increasingly bumping up their dividend payouts to investors in a sign recent stock market supervision is working, China Overseas Land report a revenue beat.

  • Hong Kong equities are surging higher today with the HSTech Index up 2.62%, and has broken above the 100-day EMA, with eyes now on the 200-day EMA at 3,663, the 14-day RSI has ticked higher again to 57, the Mainland Property Index up 1.78% at 1,206.12, breaking above the 20-day EMA with eyes now on the 50-day at 1,216 and the wider HSI is up 1.67%, now eyeing a test of the 200-day EMA, something we have not traded above since July 2023. China Mainland equities are underperforming this morning, with the CSI300 unchanged and is trading at the bottom of recent ranges, the 50 & 100-day EMA are acting as key support, a break below here could signal further weakness and a test of the 3,400 level. Small-cap indices are performing better than large cap with the CSI1000 up 0.84%, the CSI2000 is up 1.60%.
  • China Northbound had an outflow of 3b yuan on Tuesday, momentum has been decreasing over the past week with the 5-day average at -2.72billion, while the 20-day average sits at -1.37billion yuan.
  • In the property space, China Overseas Land reported a revenue beat, while operating profit increase 0.2% y/y.
  • Apple experienced a significant decline in iPhone sales in China, falling 19% in the March quarter, marking its worst performance in the country since the onset of the COVID-19 pandemic. The decline coincided with Huawei's resurgence in the premium segment, posing challenges for Apple's growth trajectory and raising concerns among investors about sustaining market share.
  • Looking ahead, HK Trade Balance on Thursday, while the calendar for China remains quiet.

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