Market Insights: May 17th, 2024

Economic Data

• Industrial Output: According to data released by the National Bureau of Statistics, the added value of industrial enterprises above designated size increased by 6.7% year-on-year in April. On a month-over-month basis, the added value of these enterprises grew by 0.97% in April. For the period January to April, the year-on-year growth was 6.3%.

Investment Trends

• Hedge Funds: In the first quarter of this year, David Tepper's hedge fund, Appaloosa Management, significantly increased its holdings of Alibaba, making it the largest position in its $6.7 billion portfolio. The fund also increased its stakes in Pinduoduo and Baidu, initiated positions in JD.com, FXI, and KWEB, and reduced its holdings in JD Mall, NIO, and Li Auto.
• Ping An of China: Ping An is considering further reducing its holdings in HSBC. Options include selling directly in the open market or selling a significant portion to Middle Eastern sovereign wealth funds or wealthy individuals. So far this month, Ping An has sold $50 million worth of HSBC shares. Currently, Ping An holds approximately $13.3 billion worth of HSBC shares. The reduction reflects a desire to lock in profits and a belief that the chances of pushing for significant reforms at HSBC are slim.

Market Performance

• US and Hong Kong Stocks: On Friday, the major overnight U.S. stock indices saw slight pullbacks, while Hong Kong stocks continued to rise in the early session, with the Hang Seng Index opening up 0.77% and the Hang Seng Tech Index up 1.55%. Leading gainers included real estate, architectural decoration, building materials, social services, defense and military, and automotive sectors, while household appliances, electrical equipment, electronics, telecommunications, media, and food and beverage sectors weakened.
• Crude Oil and Precious Metals: Crude oil prices rose for the second consecutive day, with U.S. oil reaching a one-week high. Gold prices turned negative intraday, drifting away from a more than three-week high. Copper in London rose 2%, hitting a two-year high for consecutive sessions, while New York copper dipped from a near 2% intraday gain to fall from its two-year high.

Chinese Market

• A-shares Opening: On Friday, the three major A-share indices opened lower, with the Shanghai Composite Index down 0.02%, the Shenzhen Component Index down 0.14%, and the ChiNext Index down 0.28%. Indices for sectors like real estate and flying cars saw the biggest gains, with Konggang Co., Ltd. rising over 8%, Tiandi Co., Ltd. rising over 7%, and stocks such as Binjiang Group, Hefei Urban Construction, and Urban Construction Development following suit. Indices for precious metals, high-speed connectors, and CPO saw the largest declines. The low-altitude economy concept saw a resurgence, with Jiaokong Technology rising over 14%, Beiwei Technology hitting the daily limit, Changyuan Donggu reaching nearly 9%, and several stocks such as Lai Si Information and Hu'an Technology following higher.

Policy Dynamics

• Special Government Bonds: On May 17, the Ministry of Finance issued 40 billion yuan in 30-year special government bonds for the first time. Analysts expect that monetary policy will increasingly coordinate with fiscal policy, which may include reserve requirement ratio cuts, increased medium-term lending facility (MLF) operations, and open market purchases of government bonds. In the future, the synergistic effect of these policies is expected to produce greater results.