{"id":4709,"date":"2023-10-23T19:37:45","date_gmt":"2023-10-23T19:37:45","guid":{"rendered":"https:\/\/infundpros.com\/investment\/china-sovereign-wealth-fund-extends-buying-to-etfs\/"},"modified":"2023-10-23T19:37:45","modified_gmt":"2023-10-23T19:37:45","slug":"china-sovereign-wealth-fund-extends-buying-to-etfs","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=4709","title":{"rendered":"China Sovereign Wealth Fund Extends Buying To ETFs"},"content":{"rendered":"
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Key News<\/h3>\n

Asian equities were a sea of red as the US 10 Year Treasury rose above 5% overnight though is coming off that level this morning. Hong Kong and Thailand were closed with a full description of the holidays below.<\/p>\n

Mainland China sold off with no specific negative catalyst other than last week\u2019s stronger-than-expected September and Q3 economic data. The upbeat release may lower the probability of a \u201cpolicy bazooka\u201d in the form of massive stimulus being unleashed. Mainland markets have pierced my \u201clines in the sand\u201d (Shanghai Composite at 3,100 and Shenzhen Composite at 1,900) like a hot knife. Shanghai closed at 2,939 today while Shenzhen closed at 1,776. The Shanghai Composite\u2019s dividend yield is now 3.3% versus the 10-year China Government Bond yield of 2.7%. Breadth was awful overnight with only 440 advancing stocks versus 4,519 decliners.<\/p>\n

After the market\u2019s close, Central Huijin, the equity arm of China\u2019s sovereign wealth fund, added to their four previously announced purchases of stakes in four bank stocks and bought an undisclosed amount of equity ETFs. Central Huijin increased its stake in Industrial and Commercial Bank of China (ICBC) by 27 million shares, Agriculture Bank of China by 37 million shares, Bank of China by 24 million shares, and China Construction Bank by 18 million shares. The sovereign wealth fund already has large stakes in the banks, which were added to last week, though the moves show their belief that the equity market is oversold. Prior to the announcement, there was talk of a stabilization fund being rolled out as many have called the bottom in China\u2019s economy despite the continued sell off in stocks.<\/p>\n

Today\u2019s market action was not fueled by foreign investors as Northbound Stock Connect was closed due to the Hong Kong holiday.<\/p>\n

Western media has noted that Apple
\n AAPL
\n <\/fbs-ticker> iPhone supplier Foxconn\u2019s China offices in Guangdong and Jiangsu were visited by tax authorities while the Ministry of Natural Resources visited offices in Henan and Hubei provinces. The nature of the visits remains unknown, though the optics are awful. Foxconn\u2019s China unit, which is known as Hon Hai Precision, employs around half a million people, which makes the scrutiny a total head-scratcher, especially against the backdrop of foreign direct investment (FDI) falling further in September to -8.4% year-to-date versus last year, from August\u2019s -5.1%. Optics matter as capital migrates to where it is perceived to be treated best.<\/p>\n

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Hong Kong was closed for the Chung Yeung Festival (a.k.a. The Double Ninth Festival). This holiday is meant to be a chance for people to \u201cclimb up high mountains, clean their ancestors\u2019 graves, and eat cleansing foods to flush away stagnant energy,\u201d according to The HK Hub<\/em>.<\/p>\n

Thailand was closed for Chulalongkorn Day, which commemorates King Rama V or Chulalongkorn, which is \u201ca national public holiday to commemorate the loss of a great king, and the advancements he had brought to the country,\u201d according to Chulabhorn Graduate Institute.<\/p>\n

Shanghai, Shenzhen, and the STAR Board fell -1.47% and -1.86%, respectively, on volume that decreased -1.52% from Friday, which is 73% of the 1-year average. 440 stocks advanced while 4,519 stocks declined. Value and growth factors were both off as large caps \u201coutperformed\u201d (i.e. fell less than) small caps. All sectors were negative as materials fell -2.58%, technology fell -2.31%, and industrials fell -1.86%. The top-performing subsectors were autos, insurance, and telecommunications. Meanwhile, computer hardware, motorcycles, and internet were among the worst-performing. Northbound Stock Connect was closed. The Asia Dollar Index was slightly lower versus the US dollar while CNY was slightly higher. Treasury bonds were flat, while copper and steel were off.<\/p>\n

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Last Night\u2019s Performance<\/h3>\n

Last Night\u2019s Exchange Rates, Prices, & Yields<\/h3>\n