CBN丨Chinese A-share market remains in firm territory
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Hi everyone. I’m Stephanie LI.
Coming up on today’s program
- Chinese stocks continued to gain on Wednesday, enchanting global investors on more supportive moves;
- High-profile Hong Kong delegation tours GBA for growth opportunities.
Here’s what you need to know about China in the past 24 hours
China's A-share market has remained steadfast despite headwinds in major Asian markets at the start of the month, and is likely to provide more structural opportunities as the nation rolls out more supportive measures and its economic fundamentals stabilize further, experts said.
The benchmark Shanghai Composite Index continued to gain 0.42 percent today, while the Shenzhen Component Index jumped 0.87 percent, with the ChiNext board rallying 1.1 percent. Combined trading value at the Shanghai and Shenzhen exchanges exceeded 1.15 trillion yuan, with over 3,900 stocks in the rise.
Boosted by the Dragon Boat Festival consumption boom, shares related to consumption gained the most. Moreover, jewelry and accessories companies reported the biggest daily increase of 5.21 percent on average on Tuesday, partly due to the return of benchmark COMEX gold futures to above the $3,400 per ounce level.
"Recently, the rollout of a package of fresh policy measures in early May further stabilized expectations and markets. Stepped-up policies and stable economic growth will bring more opportunities to China's capital market in 2025," said Yang Delong, chief economist at Shenzhen-based First Seafront Fund.
Yang said that the overall valuation of the A-share market is less than one-third of the US stock market, which means great investment opportunities. "With the emergence of sci-tech innovative fields represented by artificial intelligence and humanoid robots, China's capital market is expected to attract inflow of more overseas capital," he said.
As the IPO market in China is starting to recover, three main stock exchanges accepted more applications in May than they did in the first four months combined.
The Shanghai Stock Exchange, Shenzhen Stock Exchange and Beijing Stock Exchange accepted 16 IPO applications last month, compared with 11 from January to April, according to Wind Information data. In all, 27 companies had their filings accepted in the first five months, a big jump from just two in the same period last year.
The improved quality of IPO applicants means we can expect more vibrant investment and fundraising activities from companies listed on the Beijing bourse going forward, analysts noted.
GBA express
- A high-profile delegation of consular officials and business leaders from Hong Kong are on a tour of the Greater Bay Area on Tuesday, aiming to explore the region’s rapid development. With the theme “Revisiting the Greater Bay Area to Embrace New Opportunities”, the four-day trip will take the delegation through Shenzhen, Guangzhou, and Zhuhai, with stops at key development platforms such as Qianhai, Nansha, and Hengqin. Participants will also visit leading firms such as Tencent and Medprin Biotech, and attend policy briefings by Guangdong officials.
- Guangdong has launched a 10 billion yuan intelligent industry fund in its capital city, Guangzhou, aimed at accelerating the development of AI, robotics, and semiconductor technologies. The fund's initial phase will raise two billion yuan.
- Douyin's monthly active users in Hong Kong exceeded 3 million, up 147 percent from the end of 2022 and over 60 percent from a year earlier, according to the Chinese short video platform. Its parent firm ByteDance is also accelerating its AI deployment in the city, with its cloud computing provider BytePlus launching a data center there last October.
Industry and company news
- China has launched a campaign to promote new energy vehicles in rural areas where the NEV penetration is low but consumption potential is high, according to a circular released by the MIIT and four other authorities. 124 NEV models from BYD, Geely Auto, GAC Aion, Xpeng Motors, Tesla, and other carmakers are included in the campaign.
- French President Emmanuel Macron and Envision CEO Zhang Lei attended the opening of its subsidiary AESC’s lithium-ion battery gigafactory in the northern French city of Douai yesterday. The plant can provide batteries for 200,000 EVs a year, Envision said today.
- Nio said it plans to expand into Austria, Belgium, Czech Republic, Hungary, Luxembourg, Poland, and Romania in 2025 and 2026 as the next step in its European growth journey. The Chinese NEV startup will bring cars under both the Nio and Firefly brands to these new markets. Meanwhile, Nio is still expected to achieve its profitability target in the fourth quarter, its chief executive officer said after its net loss expanded by more than 30 percent in the first quarter. Revenue rose 21 percent to 12 billion yuan.
- Tencent is ramping up efforts to recruit young talent through its largest-ever campus hiring project, aiming to offer 28,000 internship positions over the next three years. More than 60 percent of the new positions in its campus hiring are technical roles. The company has also launched a recruitment program named Qingyun, targeting elite students for AI research and leadership development through mentorship from senior executives and participation in cutting-edge projects.
Asia-Pacific highlights
- Chinese cookware maker Aishida plans to invest no more than 150 million yuan to build a cookware, small appliances, and industrial robots production base in Vietnam. Aishida's unit Aishida Hong Kong will invest in the plant located in Dong Nai province, which will help expand its business in Vietnam and Southeast Asia, it said yesterday.
- Air China and Emirates have signed an MOU to expand their reciprocal interline cooperation. The two carriers will explore reciprocal codeshare arrangements and collaborate on cargo operations and their frequent flyer loyalty programs.
- In a recent interview with the 21st Century Business Herald, Bregje de Best, Co-head of Global Corporate Banking at J.P. Morgan, said the world is undergoing a re-globalization rather than a de-globalization, especially with trade corridors which China built with the Middle East, Latin America, and ASEAN, where trade is happening between countries or regions. As China and ASEAN ushered in a new era with completed negotiations on CAFTA 3.0, their bilateral trade will see very promising figure in the first quarter, and this is a key area of focus for J.P. Morgan. Seizing new opportunities for growth in trade corridors and rapidly adjusting our deployment is a global strategic priority, she noted.
Executive Editor: Sonia YU
Editor: LI Yanxia
Host: Stephanie LI
Writer: Stephanie LI
Sound Editor: Stephanie LI
Graphic Designer: ZHENG Wenjing, LIAO Yuanni
Produced by 21st Century Business Herald Dept. of Overseas News.
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