In today’s briefing:
- Mainland Connect NORTHBOUND Flows (To 31 May 2024): Net Sell Flows on Weak Gross Volumes
- HK Connect SOUTHBOUND Flows (To 31 May 2024); Private Tech, Energy/Financial SOEs See BIG Net Buys
- KWEB Index Rebalance: ZX (9890 HK) In; Fenbi (2469 HK) Out
- A/H Premium Tracker (To 31 May 2024): HK Stocks Have an Ugly Week; AH Premium in Liquid Pairs Rises
Mainland Connect NORTHBOUND Flows (To 31 May 2024): Net Sell Flows on Weak Gross Volumes
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net SELL RMB 5.7bn of A-shares on lower gross volumes. NORTHBOUND bought Zijin, Yangtze Power, and renewables and sold SOEs.
- Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.
HK Connect SOUTHBOUND Flows (To 31 May 2024); Private Tech, Energy/Financial SOEs See BIG Net Buys
- SOUTHBOUND was again a net buyer for HK$29.7bn on small two-way volumes. Bank Of China Ltd (H) (3988 HK) dropped to #4 this week but SOE buying dominated.
- It is not clear how much of this is H/A discounts, expected dividend tax removal, and the KPIs for SOE CEOs to raise prices and payout ratios, but it continues.
- Valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows – national team and otherwise.
KWEB Index Rebalance: ZX (9890 HK) In; Fenbi (2469 HK) Out
- ZX (9890 HK) will replace Fenbi Ltd (2469 HK) in the KraneShares CSI China Internet ETF (KWEB US) at the close on 14 June.
- There will be over 6 days of ADV to sell in Fenbi Ltd (2469 HK) and we estimate over 2 days of ADV to buy in ZX (9890 HK).
- There are other ETFs that track very similar indices and there could be a lot more to trade in the stocks at the close on 14 June.
A/H Premium Tracker (To 31 May 2024): HK Stocks Have an Ugly Week; AH Premium in Liquid Pairs Rises
- The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- SOUTHBOUND’s renewed buy streak continued this past week; every day net positive. Strong net buying. NORTHBOUND saw net selling. Gross volumes on both were light.
- AH Premia rebounded off multi-year lows, on average, this past week as Hang Seng/other HK indices fell and A-shares did not do much. Liquid Hs underperformed As by 2%.
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