Premier Li & PBOC Draw The Line In The Sand

Key News

Asian equities were mixed overnight as China and Hong Kong outperformed following last week’s drawdown, which follows the strong first two weeks of the month. Two weeks forward and one week back for Chinese stocks.

The Hang Seng Tech gained +2.57%, Shanghai +1.23%, and Shenzhen +1.35%, with Hong Kong and Mainland China exhibiting very strong advancers versus decliners. Premier Li Qiang’s speech at the World Economic Forum hosted in Tianjin, referred to as the Summer Davos, was a key catalyst. However, the event has received shockingly little coverage by Western media despite 1,500 attendees from 90 countries. Premier Li reiterated a 2023 GDP target of around 5%, but comments on Q2’s strength versus Q1 lifted market sentiment. He mentioned the problems with global decoupling without naming names, i.e., the US. The speech raises hopes that stimulus is coming, which this week’s PMIs might support as bad economic news could be good news for stimulus.