CNY Ignores Western Headlines, Tencent Rises

Articles From: KraneShares
Website: KraneShares


Chief Investment Officer


Key News

Similar to yesterday, North Asia was off, while South Asia managed small gains on light volumes following the US equity market sell-off yesterday. 

US tech weakness led by Apple’s fall yesterday weighed on growth stocks in the region, with South Korea hit harder than most. Apple’s bad showing had a knock-on effect on its Asia supplier ecosystem, similar to Tesla’s effect on Asia EVs yesterday. Western media headlines are screaming about the spread of COVID in China and outbound traveler testing. 100% COVID is spreading in China though thus far, it appears to be the omicron variant as our Mobility Tracker below continues to show a pick up in city activity. I would point out how stable CNY has been, which appreciated overnight versus the US dollar. If CNY isn’t freaking out, neither should you! 

Hong Kong internet stocks were off though not nearly as much as their US ADRs yesterday, which should lead to a bounce back today. Tencent had a strong day, +2.76% following yesterday’s new game announcement though NetEase HK was off -2.88% in Hong Kong while online video plays were off with Bilibili HK -4.91% and Kuaishou -3.35%. Tencent had an even stronger day of net buying via Southbound Stock Connect than yesterday while the company continued to buy back stock. Alibaba HK was off -2.45% though the company announced a new CTO. Mainland markets were mixed as the Standing Committee announced a focus on employment in 2023, while the auto and EV industry received several positives from the Ministry of Commerce. 

The Hang Seng and Hang Seng Tech fell -0.79% and -2.49% on volume, down -25.58% from yesterday, which is 73% of the 1-year average. 124 stocks advanced, while 373 declined. Main Board short turnover fell -25.21% from yesterday, which is 78% of the 1-year average, as 19% of the Main Board turnover was short turnover. Growth and value factors were mixed as large caps outperformed slightly versus small caps. Healthcare and communication were positive, +2.19% and +1.28%, while tech -3.16%, discretionary -2.09%, and energy -1.65%. The top sub-sectors were pharma, software, and household products, while technical hardware/equipment, semis, and retailers were among the worst. Southbound Stock Connect volumes were light as Mainland investors bought $514mm of Hong Kong stocks, with Tencent having an even strong day of net buying than yesterday; Meituan was a small net buy, and Kuaishou a small net sell.

Shanghai, Shenzhen, and STAR Board were mixed -0.44%, -0.3%, and +0.52% on volume -5.91% from yesterday, which is 66% of the 1-year average. 1,491 stocks advanced, while 3,138 stocks declined. Growth factors outperformed value factors as small caps outperformed large caps. Healthcare and tech were the only positive sectors, +1.54%, and +0.49%, while real estate -1.98%, energy -1.93%, and communication -0.87%. The top sub-sectors were pharma, retailing, and aerospace, while real estate, coal, and oil/gas were among the worst. Northbound Stock Connect volumes were light as foreign investors sold -$159mm of Mainland stocks. CNY appreciated versus the US dollar +0.27% to 6.96, Treasury bonds rallied, and copper was off -0.3%.

Major Chinese City Mobility Tracker

Major Chinese City Mobility Tracker
Major Chinese City Mobility Tracker

Last Night’s Performance

MSCI China All Shares Index Average 1-Day Change %
Asian Countries Average 1-Day Change %
US & Hong Kong Dually Listed 1-Day Change %
Hong Kong's Most Heavily Traded By Value 1-Day Change (%)
Shanghai and Shenzhen's most heavily traded by value

Last Night’s Exchange Rates, Prices, & Yields

  • CNY per USD 6.96 versus 6.98 yesterday
  • CNY per EUR 7.41 versus 7.43 yesterday
  • Yield on 10-Year Government Bond 2.84% versus 2.85% yesterday
  • Yield on 10-Year China Development Bank Bond 3.02% versus 3.03% yesterday
  • Copper Price -0.30% overnight

Originally Posted December 29, 2022 – CNY Ignores Western Headlines, Tencent Rises

Author Positions as of 12/29/22 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 Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus 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 its permission. The views expressed in this material are solely those of the author and/or KraneShares and Interactive Brokers 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 buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. 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.

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