Uptick From Cycle Lows

Benchmark China-related equity indices nudged higher on Thursday, with valuations, the depth of the recent sell off and potential for the fairly imminent deployment of deeper easing measures touted as supportive factors.

• We put more weight on the positioning/technical narrative, aided by a positive lead out of the U.S.
• Flows from offshore provided some tailwinds as well, with HK-China Stock Connect schemes generating ~CNY4.2bn of net inflows for mainland stocks.
• The CSI 300 added 0.6% while the Hang Seng added 1.3%, as both rebounded from Wednesday’s cycle lows (in closing terms).
• News of an easing of some visa requirements, with a focus on economic support, wouldn’t have done the broader bid any harm.
• In terms of fiscal support for wider the economy, it appears set to remain relatively targeted (at least for now), with onshore source reports noting that “local governments are planning to reserve ultra-long-term special treasury bond projects, mainly in the areas of food, energy and industrial chain security, urbanisation, and rural revitalisation.”
• There was also more speculation re: bank lending support for the property rental market.
• Meituan shares rallied as the name completed its first stock buyback operation.
• WuXi Biologics soared on the back of its apparent confidence in achieving solid growth in ’24.
• Names linked to Hauwei’s operating system seemed to benefit from positive news in that sphere.
• Also note that BBG sources suggested that “Citadel Securities LLC has made a non-binding offer for Credit Suisse’s securities venture in China, becoming the only global financial firm to submit a bid.”