Close Navigation
Learn more about IBKR accounts
Dirty Harry Challenges Investors As Bilibili’s “Three-Body Problem” Goes Viral

Dirty Harry Challenges Investors As Bilibili’s “Three-Body Problem” Goes Viral

Posted December 12, 2022
Brendan Ahern
KraneShares

Key News

Asian equities were down today on light volumes and little market-moving news as investors wait for Tuesday’s US CPI release and Wednesday’s US interest rate decision, which could lead to another round of profit-taking by global central bank hikes Thursday. Thailand was closed for Constitution Day.

Hong Kong stocks were hit with a healthy round of profit-taking as stocks and indices hit an assortment of moving averages and big round numbers, such as the Hang Seng Index, which closed just below the 20,000 level. Mainland Chinese stocks were off just a touch. Hong Kong’s most heavily traded stocks by value were Tencent, which fell -2.46%, Meituan, which fell -6.95%, and Alibaba, which fell -3.81%. Hong Kong short sellers increased activity, though short volumes in internet stocks remain low. Remember that a PCAOB audit review decision is due by year-end, which would be a strong catalyst. US and Chinese officials met Sunday and Monday outside of Beijing to discuss several issues in advance of Secretary of State Blinken’s visit next year.

The Western media hammers China for reopening too quickly. Meanwhile, local media is more positive on re-opening and added on Monday that the health code app’s data would be destroyed following re-opening. Also making the news was the Beijing city government’s list of non-prescription domestic and foreign drugs for treating COVID symptoms, along with government officials pointing out Omicron’s low mortality rate. Could foreign prescription drugs be approved in the future? There were 2,171 new covid cases today, along with 6,455 asymptomatic cases. It is worth pointing out the strong uptick in congestion in Shanghai, Shenzhen, and Chengdu.

Real estate stocks were hammered as a number of companies announced stock issuance and selling off assets. Over the weekend, November aggregate financing and new loans came in slightly less than expected, though no one considered the data to be market-moving. Foreign investors sold -$621 million worth of Mainland stocks as Shenzhen growth stocks were net sold though Shanghai value stocks were net bought. 

Remember we have China’s big economic meeting, the Central Economic Work Conference starting on Thursday, which could provide another catalyst for bulls. Clint Eastwood’s Dirty Harry would ask investors, “Do you have the guts to buy the dip? Well, do you?”. Bilibli shares were up pre-market, though declined sharply at the market open in the US, after 100 million plays of an animated TV series, taken from the popular Chinese sci-fi novel “The Three-Body Problem,” according to Yicai Global.   

The Hang Seng and Hang Seng Tech indexes fell -2.2% and -4.05%, respectively, on volume that decreased -20.4% from Friday, which is 128% of the 1-year average. 137 stocks advanced, while 368 stocks declined. Main Board short turnover increased +1.31% from Friday, which is 123% of the 1-year average, as 17% of turnover was short turnover. Value factors outperformed growth factors, while small caps outperformed large caps. The only positive sector was energy, while real estate fell -6.17% and consumer discretionary fell -4.34%. The top-performing subsectors were food, energy, and telecom, while retail, autos, and real estate were among the worst. Southbound Stock Connect volumes were high/moderate as Mainland investors bought $819 million worth of Hong Kong stocks as Tencent was a small net buy, while Meituan and Kuiashou were small net sells. 

Shanghai, Shenzhen, and the STAR Board were diverged to close -0.87%, -0.67%, and +0.29%, respectively, on volume that decreased -9.81% from Friday, which is 96% of the 1-year average. 2,879 stocks advanced, while 2,787 stocks advanced. Value and growth factors were both down today, while small caps “outperformed” large caps.  Tech and healthcare were the only positive sectors, gaining +0.57% and +0.54%, respectively, while real estate fell -4.14%, materials fell -2.69%, and financials fell -2.68%. The top-performing subsectors were pharmaceuticals, telecom, and software while household products, precious metals and real estate were among the worst.  Northbound Stock Connect volumes were average as foreign investors were net buyers of Shanghai stocks and net sellers of Shenzhen stocks with a combined total net sell of -$621mm.  CNY fe,ll versus the US dollar -0.24% to 6.97, Treasury curve flat ended as the short end sold off, and copper fell -0.78%. 

Major City Mobility Tracker

China is a big country geographically, so we can’t apply uniform standards to the whole country. There was a strong uptick in traffic in Shanghai, Shenzhen, and Chengdu, while metro usage appears to be picking up too.

Major City Mobility Tracker
Major City Mobility Tracker

Last Night’s Performance

Asian Countries Average 1-Day Change %
MSCI China All Shares Index 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 6.98 versus 6.96 Friday
  • CNY per EUR 7.37 versus 7.32 Friday
  • Yield on 1-Day Government Bond 1.10% versus 1.12% Friday
  • Yield on 10-Year Government Bond 2.89% versus 2.89% Friday
  • Yield on 10-Year China Development Bank Bond 3.05% versus 3.04% Friday
  • Copper Price -0.78% overnight

Originally Posted December 12, 2022 – Dirty Harry Challenges Investors As Bilibili’s “Three-Body Problem” Goes Viral

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 ibkr.com.

IBKR Campus Newsletters

This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.