![]() This information should not be relied upon as a primary basis for an investment decision. This material contains general information only and does not take into account an individual’s financial circumstances. Investing involves risk, including possible loss of principal. 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. 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 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. Yield on 10-Year China Development Bank Bond 3.08% versus 3.09% yesterdayįollow on China Last Night is for informational purposes only and should not be construed as investment advice.Yield on 10-Year Government Bond 2.81% versus 2.83% yesterday.Last Night’s Exchange Rates, Prices, & Yields Investors were more focused on news of Premier Li holding an economic policy meeting focused on trade and currency stability and reports that provinces will support parents having more children through loans. Mainland Treasury bonds rallied, the currency was flat and copper managed a small gain. Foreign investors bought $391 million of Mainland stocks today via Northbound Stock Connect. ![]() In addition to clean energy ecosystem stocks, liquor stocks had a strong day in advance of the holidays. The move is despite lockdown efforts in Xi’an to contain a coronavirus outbreak. Worth noting China was one of the only markets globally with volumes up the day over day and above the 1-year average. Shanghai, Shenzhen, and STAR Board gained +0.57%, +0.18%, and +0.07% on volume +0.94% from yesterday which is 102% of the 1-year average. Rare earth stocks outperformed along with the clean technology ecosystem after five companies will spin off their rare earth units into a new company called China Rare Earth Group. The Hang Seng gained +0.4% as volume increased +17% from yesterday which is only 64% of the 1-year average. JD.com is very different than these other companies from a size, scale, and profitability perspective so these fears are not valid in my opinion and are more aligned with the shoot first/ask questions later mentality of investors. The announcement weighed on other Tencent investment holdings such as Meituan, Kuaishou, Bilibili, and Pinduoduo as investors fear they will spin-off as well. Tencent has a P/E of only 19 despite the high probability it will generate $90 billion of revenue in 2021. Tencent’s move is 100% shareholder-friendly as it highlights the significant valuation discount of the company to global peers. Tencent likely felt that the JD.com ownership violated or could be viewed as a violation of the new anti-competitive/anti-monopoly laws leading to the divestment and Tencent’s President Martin Lau stepping down from JD.com’s board. Tencent’s strong relationship and investment in JD.com led to preferential treatment on Tencent’s social media platform WeChat. JD.com Hong Kong’s share class closed -7.02% though its intraday low was -11.17%. I would assume TCEHY holders, Tencent’s unsponsored US ADR will receive cash rather than shares. Tencent gained +4.24% after announcing it will reduce its position in JD.com from 17% to 2.3% by distributing 457 million shares of e-commerce company JD.com to Tencent shareholders. The Philippines had a great day +1.81% which I am sure made our main man in Manila Brian happy. Asian equities had a good day on light volumes and little news other than increased optimism that omicron won’t lead to the world ending.
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