EVs & Internet Gain On Policy News, China Markets Outperform In Asia

KraneShares

Contributor:
KraneShares
Visit: KraneShares

By:

Chief Investment Officer

Key News

China outpaced the rest of Asia overnight as the continent’s markets were mixed as concerns over global growth continue to mount. Yesterday, US Fed Chair Jerome Powell acknowledged the risk of a recession, but the market appears to have shrugged off his statement on the issue.

Internet stocks traded sharply higher overnight on comments from President Xi, more signals of a reprieve for fintech, and a lack of new lockdown news. Alibaba led advances in the sector where most internet companies have reported Q1 earnings except for Trip.com, which reports on Monday.

The electric vehicle ecosystem was strong overnight as a State Council meeting chaired by Premier Li Keqiang reiterated policy support for automobile consumption, including the extension of tax breaks for new energy vehicles. A leading battery maker also officially unveiled a new Cell-to-Pack (CTP) battery design today, which claims to hold 13% more power than the most used battery types. Li Auto was one of the sector leaders overnight, gaining nearly +9% after launching a new SUV model.

President Xi Jinping has approved a plan to standardize and develop regulations for the payments and financial technology sector in a high-level meeting, meaning that the important regulatory period for the sector has likely come to an end.

Xi vowed to meet the government’s growth target of 5.5% in a speech at the BRICS Business Forum overnight, which is a sign that more stimulus is coming. The Chinese president also commented on Russia-Ukraine, again urging constraint from all parties and reiterating China’s “neutral” stance. Last month, I attended a private session with former Secretary of State Dr. Henry Kissinger, who said that Xi likely regrets agreeing to a partnership with Russia before the invasion and would not have done so had he known of Putin’s plans. The former statesman also reminded that China trades more with Europe and the US than with Russia.

The Hang Seng and Hang Seng Tech indexes gained +1.26% and +2.28%, respectively, overnight on volume that decreased by -5% from yesterday.

Shanghai, Shenzhen, and the STAR Board gained +1.62%, +2.08%, and +1.71%, respectively, overnight on volume that increased by +8% from yesterday.

1 day  percentage change asia
us hong kong dually lsited
Hong kong most heavily traded
shanghai and shezhen most heavily traded

Last Night’s Exchange Rates, Prices, & Yields

  • CNY/USD 6.71 versus 6.69 yesterday
  • CNY/EUR 7.07 versus 7.06 yesterday
  • Yield on 1-Day Government Bond 1.18% versus 1.21% yesterday
  • Yield on 10-Year Government Bond 2.78% versus 2.78% yesterday
  • Yield on 10-Year China Development Bank Bond 2.99% versus 2.99% yesterday
  • Copper Price -2.33% overnight

Originally Posted on June 23, 2022 – EVs & Internet Gain On Policy News, China Markets Outperform In Asia

Author Positions as of 6/22/22 are KBA, KALL, KCNY, KFYP, KCNY, KEMQ, BZUN, HSBC, KWEB, KHYB, LI US

Charts Source: KraneShares

Disclosure: KraneShares

Content on China Last Night is for informational purposes only and should not be construed as investment advice. This material represents an assessment of the market environment at a specific time and is not intended to be a forecast of future events or a guarantee of future results; material is as of the dates noted and is subject to change without notice. This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.

This material may not be suitable for all investors and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities. Investing involves risk, including possible loss of principal.

This material contains general information only and does not take into account an individual’s financial circumstances. This information should not be relied upon as a primary basis for an investment decision. Rather, an assessment should be made as to whether the information is appropriate in individual circumstances and consideration should be given to talking to a financial advisor before making an investment decision.

Forward-looking statements (including Krane’s opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results) contained in this presentation are based on a variety of estimates and assumptions by Krane. These statements generally are identified by words such as “believes,” “expects,” “predicts,” “intends,” “projects,” “plans,” “estimates,” “aims,” “foresees,” “anticipates,” “targets,” “should,” “likely,” and similar expressions. These also include statements about the future, including what “will” happen, which reflect Krane’s current beliefs. These estimates and assumptions are inherently uncertain and are subject to numerous business, industry, market, regulatory, geo-political, competitive, and financial risks that are outside of Krane’s control. The inclusion of forward-looking statements herein should not be regarded as an indication that Krane considers forward-looking statements to be a reliable prediction of future events and forward-looking statements should not be relied upon as such. Neither Krane nor any of its representatives has made or makes any representation to any person regarding forward-looking statements and neither of them intends to update or otherwise revise such forward-looking statements to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying such forward-looking statements are later shown to be in error. Any investment strategies discussed herein are as of the date of the writing of this presentation and may be changed, modified, or exited at any time without notice.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from KraneShares and is being posted with permission from KraneShares. The views expressed in this material are solely those of the author and/or KraneShares and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Forex

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.