Chinese Market
On the immediate macro front, $EVERG SERVICES(06666.HK$ surprised market players with another last-minute debt payment ahead of a Friday deadline. It marked the second time in two weeks that the giant property developer had averted default.
Given that there are several upcoming payment deadlines and Evergrande potentially remaining in a cash-strapped position, we should be expecting déjà vu-like experiences when reading news on the topic over the next few months -- Evergrande's next bond deadline looms; Evergrande averts default again ('recycle' the headlines).
Beijing is cognizant of the market anxieties surrounding the debt debacle. The state planner, the National Development and Reform Commission [NDRC], and the State Administration of Foreign Exchange [SAFE] convened a meeting with several developers on Tuesday and emphasized the importance of them meeting debt obligations.
The two authorities also shared their intention to accelerate the approval process of cross-border fund transfers for the repayment of offshore debts. Perhaps Evergrande's eleventh-hour meeting of debt obligations was due to the delays in such approvals. If the government bodies have their way, Evergrande and its peers could create less drama with their interest payments in the future.
Despite the constructive developments, the $Invesco China Technology ETF(CQQQ.US$ sank 5.1 percent last week even as its U.S. counterpart the $Invesco QQQ Trust(QQQ.US$ rose 3.4 percent. The $iShares China Large-Cap ETF(FXI.US$, which is also tech-heavy and counts $Alibaba(BABA.US$ as its second-largest holding, fell 4.3 percent, while the $SPDR Dow Jones Industrial Average Trust(DIA.US$ inched 0.5 percent higher.
The more diversified $Xtrackers Harvest CSI 300 China A-Shares ETF(ASHR.US$ was relatively steadier, declining 1.4 percent. The comparable $SPDR S&P 500 ETF(SPY.US$ headed the other direction with a similar magnitude.
The Chinese Internet sector representative ETF, the $KraneShares CSI China Internet ETF(KWEB.US$, fared worse than the broader Chinese ETFs, plunging 9.5 percent for the week. All the top ten holdings of the KWEB ETF closed in the negative. Among them, the share price of $Full Truck Alliance(YMM.US$ fell the most despite starting the week in the lead of the pack.
The early-week optimism came as the logistic-tech company announced it facilitated 35.3 million fulfilled orders with Gross Transaction Value (GTV) of RMB67.3 billion in the third quarter, representing 78.4 percent and 48.8 percent year-over-year growth, respectively. Mr. Peter Hui Zhang, Founder, Chairman and Chief Executive Officer of FTA, expressed the management's confidence that "user growth will gradually resume if the pending cybersecurity review of our Yunmanman and Huochebang apps is completed favorably to us."
$Bilibili(BILI.US$, the second-largest weekly loser, sank 10.7 percent. Incidentally, both YMM and BILI stocks were the top two gainers the previous week, epitomizing the saying 'every dog has its day' in reverse.
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Leoi : BABA is fine now: the CCP signalled it will lay off of it.
EverGrande's orderly de-leveraging is all drama and no punch. Markets currently assign zero risk on its impact to China stocks.
Apollod Wed : Another good read! I'm still long, but I know that many investors will choose to stay clear of CN stocks, citing "Fool me once...fool me twice..."
Rann New : While BABA revenue is revised up, its earning (EPS) is revised down. This is due to the financial numbers consolidation on investment and donation. Since the upcoming report will be the 1st one after the "donation/investment" announcement, it is not clear until we see how these are factored in and treated in this report. The Street lumped them under the cost / expenditure, without fully understanding of the treatment.
MHfin : Bloomberg I no stick to . Fundamental I stick ti