Chinese assets across the board surged! XPENG-W soared 12%, brokerage stocks exploded, and Hang Seng Technology rose over 3%!
Over the weekend, the Chinese capital market was flooded with positive news, including halving the stamp duty and reducing financing margins. The Hong Kong Stock Exchange has also reminded that the adjustment of mainland stamp duty is applicable to the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect. The Hong Kong government is also studying how to increase the liquidity of Hong Kong stocks, and there may be adjustments to the stamp duty on Hong Kong stocks.
After the heavyweight policy was widely discussed over the weekend, Chinese assets surged across the board!
On Monday, August 28th, both Hong Kong and A-shares rose sharply, with the Hang Seng Index, Shanghai Composite Index, and Shenzhen Component Index all up more than 2%. The ChiNext Index even rose more than 3%, and the Hang Seng Tech Index surged over 3%.
Looking at the market, all sectors in Hong Kong stocks are rising, with technology, healthcare, finance, and consumer sectors leading the gains.
Chinese internet companies opened higher, but their gains have since retreated. NetEase led the way with a rise of over 4%, while Alibaba, Tencent, Bilibili, Meituan, JD.com, and Kuaishou all rose more than 2%.
New energy vehicle stocks soared, with XPeng Motors leading the way, rising as much as 16% at one point, but the gain has now narrowed to around 13%; NIO and Li Auto rose more than 4%, and BYD rose more than 2%.
In terms of news, XPeng and Didi announced their cooperation, with Didi selling related assets and research and development capabilities of its intelligent electric vehicle project to XPeng. XPeng Motors will use this to create an A-level intelligent electric vehicle, codenamed "MONA," as the first product of its new brand. This model will differentiate itself from XPeng's existing brand and is expected to be mass-produced and launched in the market by 2024.
Among brokerage stocks, Haitong International rose more than 8%, Guotai Junan International rose more than 6%, and China Merchants Securities, CITIC Securities, and CITIC Securities International all rose more than 3%.
Real estate stocks also saw significant gains, with Greenland Holdings up 10%, Country Garden up more than 8%, and Longfor Group, New World Development, Zhongjun Holdings, and Vanke Enterprises all rising more than 5%.
China Evergrande, which resumed trading today after a 17-month suspension, opened nearly 90% lower and has since slightly narrowed its decline to 80%.
Chinese assets have rebounded significantly, and the reason? Of course, it's the heavyweight positive news that China's capital market received over the weekend!
On August 27th, the China Securities Regulatory Commission issued four policies, demonstrating the Chinese government's determination to invigorate the capital market. The specific policies are as follows:
Starting from August 28th, 2023, the securities transaction stamp duty will be halved;
Regulate the reduction of holdings by related parties, encourage commitments not to reduce shareholdings or extend the lock-up period, strictly control the total amount of share reductions by other shareholders of listed companies, and guide them to reasonably arrange the pace of reductions according to market conditions. For listed companies that have experienced a decline below the issue price or a decline below the net asset value, or have not distributed cash dividends in the past three years, with the cumulative cash dividends amounting to less than 30% of the average net profit of the past three years, controlling shareholders and actual controllers shall not reduce their holdings of the company's shares through the secondary market.
Temporarily tighten the pace of IPOs to promote dynamic balance between investment and financing (real estate listed companies' refinancing is not restricted by price drops, net asset value drops, or losses);
Reduce the minimum margin requirement for investors' securities financing purchases from 100% to 80%.
Meanwhile, the Hong Kong Stock Exchange specifically notes that the adjustment to halve the securities transaction stamp duty in the mainland also applies to the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect.
In addition, the Hong Kong government has announced the establishment of a working group led by the Financial Secretary to study measures to boost stock market liquidity. The Hong Kong Stock Exchange is discussing measures to stimulate Hong Kong stock trading, including the transaction stamp duty.