CLN
Key news
Asian stocks were mixed overnight, with China underperforming.
Healthcare was the worst performing sector in Hong Kong overnight after contract research giant WuXi Biologics issued a negative medium-term growth outlook. The main factors were the end of the COVID-related business boom and less funding for small biotech companies due to rising interest rates. However, the company expects a recovery in the second half of 2024. Other subcontractors also declined overnight. Trading in the company’s shares was halted following the announcement. However, it is important to note that WuXi is one of the largest contract manufacturers in the world, with a global presence and a customer base that is likely to continue to be a global leader. Trust in the biotechnology industry is at an all-time low and this is a global problem, not just a Chinese problem.
On Sunday, the China Securities Regulatory Commission (CSRC) issued a statement reaffirming its easing of monetary and fiscal policy. The released statement included multiple recommendations and plans to strengthen support for financial markets, including encouraging companies to buy back shares and pay dividends. Meanwhile, a Singapore-listed ETF targeting Shanghai-listed stocks has been approved by regulators.
An ETF listed in mainland China saw significant buying overnight with volume of more than $40 million, the second highest since its inception earlier this year. Rumor has it that the purchase was motivated by the “national team” or by sovereign wealth funds going public.
The Hang Seng and Hang Seng Tech indices both closed down -1.09% and -1.86%. respectively, overnight on a volume down -7% compared to yesterday. Mainland investors sold a net -$89 million worth of Hong Kong stocks overnight via Southbound Stock Connect. The best performing sectors overnight were Materials, which gained +1.01%, Energy, which gained +0.38%, and Industrial Products, which gained +0.03%. . Meanwhile, the worst performing sectors were Healthcare, down -8.90%, Communication Services, down -2.19%, and Consumer Discretionary, down -1. 64%.
Shanghai, Shenzhen and STAR Board all closed down -0.29%, -0.34% and -0.65%, respectively, on volume down +2% from Friday. Foreign investors sold a net $184 million worth of mainland stocks overnight via Northbound Stock Connect. The best performing sectors overnight were Energy, which gained +0.83%, Materials, which gained +0.22%, and Communication Services, which gained +0.19 %. At the same time, the worst performing sectors were real estate, down -1.82%, healthcare, down -1.64%, and consumer staples, down -1.64%. -0.83%.
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Last night’s performance
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Last night’s exchange rates, prices and yields
- CNY per USD 7.14 compared to 7.13 on Friday
- CNY per EUR 7.74 against 7.76 on Friday
- Yield on 1-day government bonds 1.17% compared to 1.38% on Friday
- Yield on 10-year government bonds 2.67% compared to 2.66% on Friday
- China Development Bank 10-year bond yield 2.78% vs. 2.77% Friday
- Copper price -0.39%
- Steel price -0.18%