The new launch of STAR Board have sent glimpse of hope across the equity space

Greater China Sales Traders

Summary:  Traders’ buying spree in both Hong Kong and China has taken a step back from rapid activities in June as trade war unfolded with elevated uncertainty in the playbook. However, despite the overall bitter investment environment, the stability measure adopted by China and the new launch of STAR Board have sent glimpse of hope across the equity space.


Stock Connect and HK IPOs

Northbound Trading

  • A relatively sluggish July has netted only 12.0 Billion RMB (1.71 Billion USD) inflow into China A-shares market for the month via Northbound transactions, which is equivalent to a 72% decline from June’s 42.6 Billion RMB.
  • 8 days ended with net sell out of the total 22 trading days in July.
  • Pressure on China’s factories eased a little in July driven by growth-supporting measures from the government, but overall manufacturing activity remained in contraction territory as the prolonged trade war tension dragged on and further dented the US export orders.
  • Softened industrial profits since the second half of 2018 as the economy slowed and the U.S.-Sino trade dispute escalated further drove many industrial firms to put off business decisions and scale back manufacturing investment.
  • U.S. and the Chinese negotiators ended a brief round of trade talks on the last day of July but with little sign of progress whilst agreed to meet again in September, further dragging on an uneasy truce in a year-long trade war between the world’s two largest economies.
  • Market speculations have China going to adopt proactive fiscal policies, which include cutting fees and tax, boosting infrastructure investment, while keep up with maintaining prudent and stable monetary policy in the longer term. Thus, the sentiment has been reflected as buying support in the infrastructure and lenders space.
  • China has officially launched STAR Board trading on 22-Jul with 25 listed names coming from innovative technology industry. Most stocks on the new trading board extended gains throughout the first week with only 1 stock ended slightly lower compared to the first listing price. It is a structural opportunity in China’s tech sector for China traders considering Beijing’s urgency to seek tech independence amid a tiring trade war with the U.S. However, Star Board is only available for domestic investors for the time being. It will onlybe offered via stock connect trading at a later stage.
Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-hk/legal/disclaimer/saxo-disclaimer)

Saxo Capital Markets HK is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061). Registered address: Rooms 2001-02, 20/F York House, The Landmark, 15 Queen's Road Central, Hong Kong

By clicking on certain links on this site, you are aware and agree to leave the website of Saxo Capital Markets, proceed on to the linked site managed by Saxo Group and where you will be subject to the terms of that linked site.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

Please note that the information on this site and any product and services we offer are not targeted at investors residing in the United States and Japan, and are not intended for distribution to, or use by any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. Please click here to view our full disclaimer.