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CLN KraneShares Key News Asian equities were higher as South Korea and Hong Kong outperformed. The State Administration of Financial Supervision issued a statement titled “Notice on Financial Support for the Resumption and Expansion of Consumption,” asking financial institutions to increase support for “the expansion of automobile consumption, increasing financial support for new consumption and service consumption, reducing consumer finance costs…”. The notice emphasizes the support for small businesses that employ most people in China versus state-owned enterprises (SOEs). Easing auto loan policies with an emphasis on electric vehicles (EVs) sent autos higher in Hong Kong. BYD gained +1.94%, Li Auto gained +3.46%, XPeng gained +2.72%, and NIO gained +5.59%. Consumer discretionary stocks also saw a boost from the official guidance on stimulus. Bloomberg’s article yesterday that China’s fiscal deficit will be expand by +3% this year was a positive tailwind though it remains unconfirmed. Senate Majority Leader Schumer’s visit along with five other Senators appears to have been quite successful. China re-released their statement following the heinous attack on unarmed Israeli citizens and potential progress on fentanyl. US dollar weakness also supported markets overnight. The US 10-year Treasury Yield declined, sending CNY and the Asia Dollar Index higher. It is worth noting that the strong outperformance of the growth factor versus the value factor in Hong Kong and Mainland China. Investors want the “good stuff” and not slow/no-growth value sectors. Value sectors were the weakest performers in Hong Kong today as materials gained +0.21%, energy gained +0.23%, and financials gained +0.03% versus growth sectors including technology, which gained +2.53% and consumer discretionary, which gained +1.95%. What percentages are these sectors in your EM and China investments? Both Hong Kong and Mainland China had strong volume as the former saw far more advancers than decliners. Healthcare, which is a growth…

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Filed under: News - @ October 11, 2023 5:18 pm