Asian stocks were combined overnight on weak volumes and little meaningful news as South Korea posted consecutive days of 1% for the first time since early July, whilst the Philippines under -performed.

There was little news on developments in markets in mainland China and Hong Kong as sensible policymakers met at the China Economic Work Conference (CEWC). A Reuters report is circulating that the Chinese government is intentionally weakening the renminbi to offset Trump’s price lists. This article seems absurd to me, because we know that interest rates are being cut in China, which, depending on the number of cuts by the US Federal Reserve, may affect the renminbi, to the point that exchange rate differentials Interest rates are a vital factor in currency movements. The Chinese bond market agreed with me when the 10-year government bond yield hit a 52-week record low of 1. 84%. It is unexpected that China is relaxing and still has no foreign buyers due to Trump’s tariff concerns.

The CEWC lays out the economic plan as a whole, although it is sometimes incomplete in specific details, as the dual sessions in March will finalize and approve the actual game plan. A strong situation is imaginable due to the intense concentration of investors on the issue and the recent PolitburoArray that included President Xi in the headlines. In addition to greater aid for housing and local governments, it would make sense to implement greater customer subsidies for automobiles/electric/hybrid cars and home appliances for electronics, textiles, and restaurant customers.

Car production employs many other people, and BYD employs more than 700,000 more people!Electronics companies, plus those that make hardware for PCs, mobile phones, laptops, and desktops, employ many other people besides mom-and-pop restaurants and chain restaurants. We may also see structural issues addressed, such as the conversion of China’s minimum social safety net (healthcare, pensions, and social security) and the rights of migrant employees. Coincidentally, a continental media outlet reported that the Ministry of Human Resources and Social Security will expand the Individual Retirement System (think IRA in the United States), from the initial pilot program to 36 locations nationwide.

Investors in mainland China seemed to think this was positive for customer spending, as customer subsectors fared better, adding retail, recreational products, family products, textiles (perhaps in some other area, I had a hard time finding a full job) and alcohol. Does the continent tell us anything about its customer-centric purchasing? However, we will see that Hong Kong’s weak income actually helps this idea.

Hong Kong fell in the trading day as sentiment among foreign investors remains pessimistic and awaiting concrete political evidence. Growth stocks fell, with the exception of electric vehicle (EV) stocks, following strong November auto sales of 3,316,000, up +11. 7% year-over-year. the other (year-on-year) and +8. 6% month-on-month (MoM), with 1. 51%. million sales of electric and hybrid vehicles. The launch of the Cybertruck in China is also announced. The National Cyberspace Administration has announced that it will review stock/financial recommendations on social media platforms, although this focuses more on Americans than the platforms. Don’t worry about this issue. Mainland investors bought Hong Kong’s dip today with a hefty $937 million worth of Hong Kong stocks and ETFs. Light volumes in the national team’s favorite ETFs, although 2,446 mainland corporations bought RMB 160 billion ($336 billion) through redemptions in 2024.

The Hang Seng and Hang Seng Tech fell -0. 77% and -1. 31% respectively, with volume down -42. 79% from yesterday, or 109% of the one-year average. 292 stocks rose, while 192 fell. Main Board short turnover decreased -44% from yesterday, or 109% of the year-over-year average, as 15% of turnover was short turnover (short turnover in Hong Kong includes short volume of ETFs, which makes up our minds through ETF coverage from market makers Value stocks and large cap stocks “outperformed”/fell less than growth stocks and small cap stocks Sectors. leaders were the services Public, with an increase of +1. 84%, Materials, +0. 93%, and Basic Consumption, +0. 67%, while Technology fell -1. 15%, Real Estate fell -1. 10% and Discretionary Customers. falls -1. 08%. The most sensitive subsectors were steel, sanitary appliances and food, while commercial conglomerates, customer facilities, monetary facilities and insurance were the worst. Southbound Stock Connect prices were 1. 5 times pre-inflation levels as mainland investors bought more than $937. million Hong Kong stocks and ETFs, with HK Tracker ETF being a giant net buy, China Mobile and Alibaba being giant/moderate net buys, Tencent and Meituan are moderate. net sales, and Xiaomi and Sunac were small net sales.

Shanghai, Shenzhen, and the STAR Board were mixed +0.29%, +0.76%, and -0.37%, respectively, on volume down -19% from yesterday, which is 177% of the 1-year average. 3,810 stocks advanced, while 1,206 declined. Growth and small capitalization stocks outperformed value and large capitalization stocks. The top sectors were energy, up +1.33%, real estate, up +0.96%, and materials, up +0.53%, while financials fell -1.27%, communication services fell -0.94%, and industrials fell -0.61%. The top sub-sectors were soft drink, forest, and leisure products, while insurance, banking, and land transport were the worst. Northbound Stock Connect volumes were almost 1.5X average. CNY and the Asia dollar index fell versus the US dollar. Treasury bonds rallied. Copper rose while steel fell.

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