{"id":6035,"date":"2023-10-27T15:53:02","date_gmt":"2023-10-27T15:53:02","guid":{"rendered":"https:\/\/infundpros.com\/investment\/the-command-control-of-chinas-stock-market-week-in-review\/"},"modified":"2023-10-27T15:53:03","modified_gmt":"2023-10-27T15:53:03","slug":"the-command-control-of-chinas-stock-market-week-in-review","status":"publish","type":"post","link":"https:\/\/infundpros.com\/?p=6035","title":{"rendered":"The Command &#038; Control Of China\u2019s Stock Market, Week In Review"},"content":{"rendered":"<div>\n<h3 class=\"subhead3-embed color-body bg-base font-accent font-size text-align\">Week in Review<\/h3>\n<ul>\n<li>Hong Kong and Mainland China were the only markets to end the week in positive territory as the rest of Asia traded lower.<\/li>\n<li>Central Huijin, an investment firm with ties to China\u2019s sovereign wealth fund, stepped up its stock purchases this week, especially in large banks and ETFs.<\/li>\n<li>An increase in China\u2019s fiscal deficit to support infrastructure development and stimulate the economy was confirmed this week as Xi Jinping visited the People\u2019s Bank of China (PBOC) for the first time ever.<\/li>\n<li>A slew of buyback announcements from major Mainland-listed corporations including Aier Eye Hospital and CATL, helped support stock gains in China this week.<\/li>\n<\/ul>\n<h3 class=\"subhead3-embed color-body bg-base font-accent font-size text-align\">Key News<\/h3>\n<p>Asian equities ended the week on a positive note as Hong Kong and Mainland China outperformed while the Philippines and Singapore underperformed. Overnight, Hong Kong-listed internet names outperformed their US-listed counterparts yesterday, which is leading to gains in US trading this morning.<\/p>\n<p>US-China diplomatic green shoots continue to surface. Foreign Minister Wang Yi met with Secretary of State Anthony Blinken yesterday and he is expected to meet with President Biden today. Meanwhile, expectations for a Biden-Xi summit at the Asia Pacific Economic Cooperation (APEC) Conference have risen. The Associated Press was one of the few media outlets to publish Wang\u2019s comment that the US and China should \u201cpush the relationship as soon as possible back to the track of healthy, stable, and sustainable development.\u201d<\/p>\n<p>September industrial profits rose +11.9% year-over-year (YoY) versus August\u2019s +17.2% as the year-to-date decline decreased from August\u2019s -11.7% to -9%. This is yet another sign of China\u2019s economy stabilizing and improving slowly. There was a fair amount of chatter on a fourth-quarter bank reserve requirement ratio (RRR) cut with a government economic meeting scheduled for next week.<\/p>\n<p><fbs-ad position=\"inread\" progressive=\"\" ad-id=\"article-0-inread\" aria-hidden=\"true\" role=\"presentation\"><\/fbs-ad><\/p>\n<p>There was also more buyback talk. Several companies announced buybacks, including China\u2019s most heavily traded stocks by value such as battery giant CATL, which gained +3.73% on the announcement of a RMB 2 billion to RMB 3 billion stock buyback, which will be used for \u201cstock incentive plans for employees,\u201d according to Bloomberg. Also, Livzon Pharmaceutical announced a buyback of RMB 400 million to 600 million and Joincare Pharmaceutical, which announced that it had bought back 48 million shares, representing 2.54% of shares outstanding. Meanwhile, HSBC<fbs-ticker data-name=\"HBA\" data-href=\"https:\/\/www.forbes.com\/companies\/hsbc\" data-type=\"stock\"><br \/>\n  HBA<br \/>\n <\/fbs-ticker>, AIA, and Standard Chartered all bought back stock overnight.<\/p>\n<p>If you believe that China is a command-and-control economy, it is not hard to see that the government is trying to gain control on the stock market\u2019s slide, while commanding companies and investors to buy stock. Foreign investors were net buyers of mainland stocks via Northbound Stock Connect for the second day in a row to the tune of $627 million.<\/p>\n<p>Healthcare, which is a growth sector rather than a defensive one in China, was the top-performing sector as several companies reported strong quarterly results. Biotech firm CSPC Pharmaceuticals (1093 HK) gained +10.82% on a cancer drug trial approval. Fundamentals are driving stock prices, at least in health care.<\/p>\n<p>Hong Kong-listed internet stocks had a strong day as Hong Kong\u2019s most heavily traded stock Tencent gained +1.81%, Alibaba gained +3.32%, and Meituan gained +2.92%. Remember that we are two weeks away from Singles Day, as early data appears strong.<\/p>\n<p>The US does not have a trade deficit with China based on how the Chinese government defines trade. If you add the revenue from US companies in China to the traditional definition of trade, which includes only goods put on a ship, there is no deficit.<\/p>\n<p>The Hang Seng and Hang Seng Tech indexes gained +2.08% and +2.52%, respectively, on volume that increased +13.21% from yesterday, which is 81% of the 1-year average. 430 stocks advanced while 64 stocks declined. Main Board short sale turnover declined -5.34% from yesterday, which is 74% of the 1-year average, as 15% of turnover was short turnover (remember Hong Kong short turnover includes ETF short volume, which is driven by market makers\u2019 ETF hedging). The growth factor outperformed the value factor while small caps outpaced large caps. All sectors were positive as healthcare gained +6.72%, real estate gained +3.2%, and consumer staples gained +3.07%. All subsectors were positive as pharmaceuticals, semiconductors, and healthcare equipment led. Southbound Stock Connect volumes were moderate as Mainland investors bought $308 million worth of Hong Kong-listed stocks and ETFs with Tencent, Li Ning, and Semiconductor Manufacturing (SMIC) were small net buys.<\/p>\n<p>Shanghai, Shenzhen, and the STAR Board gained +0.99%, +1.82%, and +1.48%, respectively, on volume that increased +14.44% from yesterday, which is 110% of the 1-year average. 3,874 stocks gained while 1,017 declined. The growth factor outperformed the value factor while small caps outpaced large caps. The top-performing sectors were healthcare, which gained +3.97%, industrials, which gained +2.01%, and communication services, which gained +1.95%. Meanwhile, financials and energy were off -0.07% and -0.19%, respectively. The top-performing subsectors were biotech, chemical, and pharmaceuticals. Meanwhile, insurance, coal, and precious metals were among the worst-performing. Northbound Stock Connect volumes were moderate as foreign investors bought a net $627 million worth of Mainland stocks, including Tianqi Lithium, which was a large net buy, BYD and CTG Duty Free, which were small net buys. Meanwhile, Shanxi Fine Wine was a moderate net sell along with pharmaceutical company HR, Mindray, and ZTE, which were all small net sells.<\/p>\n<p><strong>Upcoming Webinar<\/strong><\/p>\n<p>Join us Wednesday, November 1st, at 7:30 pm EDT for our live webcast:<\/p>\n<p><strong>Decoding China&#8217;s Real Estate Sector with Nikko AM &amp; Deep Dive On Chinese Asset Class Opportunities<\/strong><\/p>\n<p>Please click here to register.<\/p>\n<p>Join us Thursday, November 2nd, at 2:00 pm GMT for our live webcast:<\/p>\n<p><strong>China Q3 Review: Lines in the Sand &amp; Policy Support<\/strong><\/p>\n<p>Please click here to register.<\/p>\n<h3 class=\"subhead3-embed color-body bg-base font-accent font-size text-align\">Last Night\u2019s Performance<\/h3>\n<h3 class=\"subhead3-embed color-body bg-base font-accent font-size text-align\">Last Night\u2019s Exchange Rates, Prices, &amp; Yields<\/h3>\n<ul>\n<li>CNY per USD 7.32 versus 7.32 yesterday<\/li>\n<li>CNY per EUR 7.75 versus 7.73 yesterday<\/li>\n<li>Yield on 1-Day Government Bond 1.55% versus 1.60% yesterday<\/li>\n<li>Yield on 10-Year Government Bond 2.71% versus 2.72% yesterday<\/li>\n<li>Yield on 10-Year China Development Bank Bond 2.75% versus 2.76% yesterday<\/li>\n<li>Copper Price +0.03% overnight<\/li>\n<li>Steel Price +0.65% overnight<\/li>\n<\/ul>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.forbes.com\/sites\/brendanahern\/2023\/10\/27\/the-command--control-of-chinas-stock-market-week-in-review\/\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Week in Review Hong Kong and Mainland China were the only markets to end the week in positive territory as the rest&#8230;<\/p>\n","protected":false},"author":1,"featured_media":6036,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24],"tags":[],"class_list":{"0":"post-6035","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investment"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Command &amp; Control Of China\u2019s Stock Market, Week In Review | inFundPros<\/title>\n<meta name=\"description\" content=\"Week in Review Hong Kong and Mainland China were the only markets to end the week in positive territory as the rest of Asia traded lower. 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