Trade Deal impact on equities diminished by MSCI inclusion Trade Deal impact on equities diminished by MSCI inclusion Trade Deal impact on equities diminished by MSCI inclusion

Trade Deal impact on equities diminished by MSCI inclusion

Greater China Sales Traders

Summary:  2 key events logged on the same day in November with MSCI A shares inclusion and Alibaba's Hong Kong debut supported wider sentiment in the stock market. HIBOR rate spiked on high demand on HKD fund with behemoth IPO listing along with year-end effect.

Stock Connect and HK IPOs

Northbound Trading

  • November saw another record setting moment for Northbound activities with the week ending 29-Nov booking the highest net inflow for a single week at 31.9 Billion RMB (4.55N USD), pushing the monthly level to over 60.4B RMB (8.58B USD) despite a lack of fundamental driver in local market and a stagnant progress from the US-China trade front.
  • Last month also marked the second highest inflow month in the year, only second to September volume at 64.6B RMB, with buyers rushing to the market following MSCI’s A-share inclusion.
  • One of the key events in the month is the MSCI inclusion of China A-shares on 26-Nov. The weighting of China A Shares in several indexes was uplifted from 15% to 20% as communicated first time in 2018. This marked another milestone for Beijing’s drive to boost their Chinese stocks’ global exposure among foreign traders.
  • In one of the most recent MSCI consultation, investors expressed several concerns with major focus on access to hedging and derivative instruments in the likes of on- and offshore index futures and options contracts. Traders also have concerns on short settlement cycle for A-shares and the misalignment between onshore China and Stock Connect holidays on top of the possibility for omnibus mechanism in stock connect markets.
  • China delivered its November manufacturing PMI at 50.2 against estimate level of 49.5 and 49.3 in October. A reading in the expansion territory signalled recovery strength in the China economy is the first upbeat reading in seven months after the US rolling out the tariff plays in May. Caixin PMI numbers are also in line at expansionary level of 51.8.
  • Offshore Yuan also recovered substantially at one point in early November with the exchange rate per US Dollar coming back down to 6.97 range on US-China trade optimism that a “Phase One” deal may be in sight. However, without further progress on this front following an upbeat sentiment, the exchange rate reverted to above the 7.00 key line for the last 2 weeks in the month.

The Saxo 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 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 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 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 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 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 (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo or its affiliates.

Saxo Capital Markets HK Limited
19th Floor
Shanghai Commercial Bank Tower
12 Queen’s Road Central
Hong Kong

Contact Saxo

Select region

Hong Kong S.A.R
Hong Kong S.A.R

Saxo Capital Markets HK Limited (“Saxo”) is a company authorised and regulated by the Securities and Futures Commission of Hong Kong. Saxo holds a Type 1 Regulated Activity (Dealing in Securities); Type 2 Regulated Activity (Dealing in Futures Contract); Type 3 Regulated Activity (Leveraged Foreign Exchange Trading); Type 4 Regulated Activity (Advising on Securities) and Type 9 Regulated Activity (Asset Management) licenses (CE No. AVD061). Registered address: 19th Floor, Shanghai Commercial Bank Tower, 12 Queen’s Road Central, Hong Kong.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products may result in your losses exceeding your initial deposits. Saxo does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo does not take into account an individual’s needs, objectives or financial situation. Please click here to view the relevant risk disclosure statements.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this site may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and services offered on this website are not directed at, or intended for distribution to or use by, any person or entity residing in the United States and Japan. Please click here to view our full disclaimer.

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