1. Hong Kong Stocks See Strong Gains
Last Friday, while the Chinese A-share market showed modest movement, Hong Kong stocks continued their strong upward trend after the A-share market closed at 3 PM. By the end of the day at 4 PM, the Hang Seng Index had risen by 3.69%, the Hang Seng China Enterprises Index by 4.11%, and the Hang Seng Tech Index by an impressive 5.56%. Between January 14 and February 14, the Hang Seng Tech Index surged by 30.89%, reaching its highest level since October. This is equivalent to the Shanghai Composite Index breaking the 3,700-point mark.
2. Chinese Stocks in the U.S. Also Performed Well
On the same day, although the Shanghai Composite Index edged up by only 0.43%, the A50 futures index gained over 2%, indicating strong confidence from foreign investors. Later that evening, U.S. stock markets showed mixed performance—while the Dow Jones and S&P 500 saw slight declines, the Nasdaq inched up. However, Chinese stocks listed in the U.S. saw significant gains, with the Chinese ADR Index rising by 2.73% in a single session and a total increase of 28.5% over the past month.
3. Key Financial Sector Restructuring
One of the most significant financial developments last week was the announcement that China’s Ministry of Finance would transfer its entire holdings in China Cinda, China Orient Asset Management, and China Great Wall Asset Management to Central Huijin Investment, a subsidiary of China’s sovereign wealth fund. Additionally, 66.7% of China Securities Finance Corporation’s shares will also be transferred to Central Huijin. Some analysts speculate that this move signals potential market stabilization efforts, while others see it as a step toward a more centralized capital management strategy.
4. A-Share Market Sees High Trading Volume
On Monday today morning, within just 2 hours of trading, the total turnover in the A-share market reached RMB 1.28 trillion, an increase of RMB 235.2 billion compared to the same period last Friday. Despite the high trading volume, market indices showed only moderate gains. By midday, the Shanghai Composite Index and the Shenzhen Component Index were up by 0.06% and 0.41%, respectively, while the ChiNext Index and the STAR Market Index had gained 0.61% and 0.7%. Though the index movements were limited, market participation remained highly active.
5. Mixed Performance Among Large-Cap Stocks
Out of 5,397 stocks traded in the A-share market in the morning session, 3,624 stocks gained, while 1,642 declined. Despite a broad market rally, large-cap stocks underperformed, dragging down the overall index. While smaller thematic stocks saw strong performance, the overall A-share market capitalization increased by just 0.43%, with the average stock price rising by 1.17%.
Recent gains across Chinese stocks, from U.S.-listed Chinese companies to Hong Kong and A-shares, suggest renewed investor confidence. However, the relatively weaker performance of large state-owned enterprises in the A-share market has slowed overall index growth. In contrast, the rally has been primarily driven by tech companies, which have a significant market share in U.S. and Hong Kong markets but a smaller presence in A-shares.
That said, there are signs of potential shifts. Major telecom operators, which are state-owned enterprises, have started gaining momentum, and the financial sector is also showing signs of increased activity. Additionally, the restructuring of Central Huijin’s asset holdings may have long-term implications for the market. Given these factors, investors are closely watching whether A-shares will catch up with the strong performance seen in Hong Kong and U.S.-listed Chinese stocks.