China Market Update: JD.Com’s 618 Shopping Festival Wraps Up

Key News

Asia equities grinded higher overnight following the rally in the US markets.

The market continued to digest the real estate investment data that was announced Friday post-close. The latest property transaction data shows that the volume picked up recently in big cities due to government policies that lower the downpayment requirement. Yet the improvement is limited to big cities and is marginal. The property market seems to need more time and government policy to facilitate a stronger recovery.

Today is the last day of JD.com’s signature 618 shopping festival, a one-month-long event ending on June 18th of every year. The event is a vibrant showcase of consumer trends, innovation, and the unmatched potential of Chinese E-commerce platforms. Besides great deals and discounts, we have seen widely adopted live-stream sales via AI characters this year, especially live interaction with an AI version of JD.com’s CEO. I am excited to dive into the sales data from the event once it becomes available.

Hong Kong traded sideways. This morning’s biggest headline is that Hong Kong will allow trading during typhoons starting September 23rd. The top-performing sectors in Hong Kong were information technology, energy, and industrials, while the worst-performing sectors were healthcare, materials, and real estate. Zijin Mining fell -1.5% after the company announced it is offering $2 billion worth of convertible notes and a primary placement of $500 million at a $15.50 share price point (a 5% discount from its previous close). Bilibili gained +3.2% in Hong Kong after its newly launched mobile game got a warm welcome from gamers. Southbound stock connect volume was strong as investors kept loading up Hong Kong shares, marking a 23 straight day inflow streak, with an inflow of $750 million today.

China markets closed higher across the board today. Investor sentiment is higher as the LJZ Financial Forum is expected to unveil some market-friendly measures tomorrow. CSRC Chairman Wu Qing will attend the 6/19 morning meeting and deliver a speech, and all eyes will be on market-friendly measures. Moutai again dragged today as foreign and local institutions continued to trim exposure on the liquor giant on growth slowdown and wholesale price weakness. The top-performing sectors in Mainland China were telecommunication services, industrials, and information technology, while the worst-performing sectors were healthcare, consumer discretionary, properties, and construction.

The Hang Seng and Hang Seng Tech dropped -0.11% and -0.33%, respectively. The top-performing sectors were utilities, up +0.47%, and finance, up +0.37%, while the worst-performing sectors were properties, down -0.98%, and commerce, down -0.35%. Hang Seng Tech was driven lower by internet names overnight, with China Literature down -3.33% and Netease down -3.1%. Semiconductor stocks edged higher as Hua Hong gained +3.89%, and Suny Optical gained +3.82%.

Shanghai, Shenzhen, and STAR Board were mixed at +0.48%, +0.71%, and -0.03%, respectively. The STAR board’s 5-year anniversary brought attention back to the technology sector, sending telecommunications, automation, auto driving, and other related sectors higher.

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Last Night’s Performance

Last Night’s Exchange Rates, Prices, & Yields

• CNY per USD 7.26 versus 7.25 yesterday
• CNY per EUR 7.79 versus 7.77 yesterday
• Yield on 10-Year Government Bond 2.25% versus 2.26% yesterday
• Yield on 10-Year China Development Bank Bond 2.36% versus 2.37% yesterday
• Copper Price -0.64%
• Steel Price -0.19%