Weekly review

• Over the weekend, Han Wenxiu, a member of the Central Financial and Economic Affairs Committee, spoke about the publication of the Central Economic Labor Conference (CEWC), saying that “the government should be careful before unveiling policies. that could trigger a contraction, “which could suggest a recall on Internet regulations.
• Weibo HK was down -9.62%, representing a loss of 792mm in market cap, after being fined a tiny 3mm RMB ($ 471,000) by the State Cyberspace Office. The market reaction given the small size of the fine highlights the fragility of the space on Tuesday.
• According to the Financial Times, which cited anonymous sources, the U.S. Department of Commerce is expected to update its export technology ban list on Thursday to include several private companies and potentially some biotech names on Wednesday.
• Trip.com (TCOM US) released its fourth quarter financial results on Thursday ahead of the US opening today. I’m a little surprised that costs have increased although analysts have seemed impressed with the company’s bottom line.

New Keys

Asian stocks had a rough weekend. Volumes surged, driven by rebalancing of the FTSE Russell and S&P indices as well as Quad Witching. Quad Witching is the quarterly event for index and equity options and futures contracts expiring today.

Yesterday’s US tech wreck set the tone as headlines were not helpful as Asian investors digested the US export ban, which did not include the biotech company Beigene, which fell -2.41% overnight. What is the consequence for the Financial Times which announced that the company would be on the ban causing the share to fall -7.66% on Wednesday?

Hong Kong and the mainland were both down today as growth stocks / sectors were down relative to value stocks / sectors like Hang Seng -1.21% while Shanghai -1.16%, Shenzhen -1.41% and STAR Board -1.88%. Pieces of the clean energy ecosystem have held up with the gold stocks even though it has been a lousy day. The only bright spot I can find is Tencent -3.23% had the biggest influx day through Southbound Stock Connect since September 28^e while Meituan -5.29% had a small net buy from mainland investors.

The internet in Hong Kong has seen a sluggish day as many brokers have been puzzled by today’s price trends. On the days of the big index rebalancing, we shouldn’t read too much price movement in my opinion. Foreign investors sold $ 1.029 billion in mainland stocks, but for the week, foreign investors bought $ 1.801 billion in mainland stocks this week. Mainland bonds rallied, the CNY was down against the US dollar, and copper gained.

After the close, the CSRC issued another statement saying it will continue to work with the SEC and PCAOB to resolve the issue of Chinese companies listed in the United States not complying with the Holding Foreign Companies Accountable Act. The CSRC said, “At present, relevant regulatory bodies in China and the United States are negotiating audit oversight cooperation, and positive progress has been made. ” Crossed fingers!

Alibaba held its investor day yesterday and today. As is still happening as of this writing, we will do a proper debriefing on Monday. Chairman and CEO Daniel Zhang admitted that the company faces increased competition. How will the business drive growth? Increased user growth in small Chinese towns, share of portfolio expansion and value creation. Growth outside of China was a priority in addition to the growth of cloud computing. More to come from an extremely well produced event.

The CSRC, the Chinese regulator, noted that mainland investors will not be allowed to trade through Northbound Stock Connect. The CSRC noted that the number of continental investors using Northbound Stock Connect is low, although I don’t understand why a continental investor would use Connect.

The April 2022 Evergrande bond gained + $ 0.07 to $ 21.80 while the June 2025 Evergrande fell from $ -0.11 to $ 19.20. I also noticed that Ping An Healthcare and Technology (1833 HK) filed after closing to buy 56mm shares.

Last night’s exchange rates, prices and yields

• CNY / USD 6.38 vs. 6.37 yesterday
• CNY / EUR 7.22 vs. 7.21 yesterday
• 10-year government bond yield 2.85% vs. 2.86% yesterday
• 10-year Development Bank of China bond yield 3.09% vs. 3.09% yesterday
• Copper price +1.97% overnight