Market Highlight

Asian stocks were mixed while US futures climbed, with traders bracing for another bumpy week. Treasuries and the dollar were steady. WTI rose while gold declined. Nickel edged higher in early Asian trading as contracts resumed normal hours, more than a year after the LME suspended trading.

The Hang Seng Index opened 1.5% lower, dropping 294.43 to 19,621.25, as stocks lose for the second straight day in Hong Kong. Meituan contributed the most to the index decline, decreasing 5.4%. China Petroleum & Chemical Corp. had the largest drop, falling 6.0%. In early trading, 63 of 76 shares fell, while 11 rose; all sectors were lower, led by commerce and industry stocks.

China's CSI 300 Index fell 0.3%, while the Shanghai Composite declined 0.4%. CSI 300 Energy Index stocks led the benchmark lower, with seven of 10 sectors declining. On the CSI 300, 178 of 292 stocks fell, while 114 rose. China Shenhua Energy Co. led the declines, falling 5.2%, while Hithink RoyalFlush Information Network Co. gained, rising 16%.

Important News

• Sinopec (386 HK) falls as much as 7.7%, the most in about 10 months, after the firm’s full-year earnings missed expectations weighed by the lackluster performance of its chemicals business. Analysts also note that a lot of the optimism surrounding state- owned enterprises reform and expectation of dividend payout may have been priced in.
   
• China National Building Material (3323 HK) drops as much as 11%, the most since March 2022, after it reported net income for the full year that missed the average analyst estimate.
   
• Crypto firms rushing into Hong Kong after the city opened its doors to the battered sector are finding a surprising source of potential support: China’s state-owned banks. Chinese banks have been directly reaching out to crypto businesses over the past few months, adding to signs that the city’s push to become a major digital asset center has backing from Beijing, even though trading of crypto has been banned on the mainland for well over a year.
   
• Market sentiment was hurt by a sell-off in Deutsche shares, which tumbled as much as 15%, as its credit default swaps, which reflect the cost of insuring debt against the risk of non-payment, shot to their highest in more than four years. Short sellers have made a profit of over $100 million on paper betting against Deutsche Bank stock over the last two weeks, financial data company Ortex said on Friday.
   
• Bond investors may be a step ahead of Kashkari, as they're already betting on a US recession. The yield curve is headed for its steepest monthly incline since October 2008, after traders axed wagers on any further rate hikes this year and ramped up bets on cuts. Bloomberg Economics sees a 75% chance of recession in the third quarter.
   
• ANZ’s CEO said on Monday the latest turmoil in the global banking system had the potential to trigger a financial crisis though it was early to predict it could bring one similar to that in 2008.
   
• First Citizens BancShares Inc was in advanced talks to acquire Silicon Valley Bank, a person familiar with the matter told Reuters on Sunday.
   
• Standard Chartered plans to sell its Jordanian business to Arab Jordan Investment Bank (AJIB), the two parties said on Sunday, as the emerging markets-focused lender presses ahead with plans to exit seven markets in Africa and the Middle East.
   
• The integration team tasked with merging Switzerland's two largest banks is to be headed by UBS's chief technology officer and Credit Suisse's chief operating officer, the Tages-Anzeiger newspaper reported on Saturday. Mike Dargan, who has been with UBS for 7 years, and Francesca McDonagh, who joined Credit Suisse last September, will be tasked with unifying the two banks.
   
• Credit Suisse tapped the Swiss National Bank for "a large multi-billion amount" last weekend to secure its liquidity, the country's finance minister Karin Keller-Sutter told Swiss broadcaster SRF on Saturday. The troubled Swiss bank had said last week it intended to borrow up to 50 billion Swiss francs from the country's central bank to boost its liquidity.
   
• Elon Musk has offered the social-media company's employees stock grants at a valuation of nearly $20 billion, the Information reported on Saturday, citing a person familiar with an email Musk sent to Twitter staff.
   
• According to data from Vanda Research, as of Wednesday, Net daily purchases of Tesla shares by individuals have fallen by about three-fourths from a peak of $436 million on March 1. Retail traders whose purchases have helped push the electric-vehicle maker's stock up over 50% in 2023 are pulling back this month amid disappointment over a recent investor day and concerns over the health of the economy.
   
• Where money goes now? Global money market and government bond funds received massive inflows in the seven days to March 22 as investors scrambled for safety amid turmoil in the U.S. and European banking sectors, which has revived memories of the 2008 financial crisis. Global money market funds drew a net $120.72 billion in inflows, the most in a week since April 2020. Government bond funds attracted a net $10.15 billion after witnessing $8.24 billion of net purchases in the previous week.
   
• Investors are dividing corporate borrowers into haves and have-nots. Last week, 18 blue-chip firms including UnitedHealth and Marriott priced about $21 billion of bonds, while high-yield debt has reached only $4.15 billion for the entire month — the lowest March volume since 2020.
   
• Chris Rokos' macro hedge fund told clients it's cut risk after losing 15% this month through March 17, which if sustained would mark its second-worst month on record. By contrast, Black Swan funds are having a great month. The bank turmoil is driving interest in hedging tail risks, with an actively traded ETF up 4% so far, suggesting a market-wide blowup would lead to big payouts.
   
• In the week ahead, market participants will be monitoring any developments in the failing banking sector, while goods trade balance, CB consumer confidence, pending home sales, GDP, PCE and Michigan consumer sentiment, as well as speeches from the Fed's Jefferson, Yellen and the FOMC's Barkin will also be closely watched.
   
• Chart of the Day: Bank turmoil and recession risks are depressing the global IPO market after investors started the year optimistic on China's reopening hopes and the prospect of smaller rate hikes. Firms have raised only $19.7 billion in 2023, down 70% year on year and the slowest start since 2019. Just $3.2 billion has been raised in the US.

Hong Kong

Option Name

Last Price

700 HK 03/30/23 P360 Equity

3.91

386 HK 04/27/23 C4.6 Equity

0.1

386 HK 06/29/23 C5 Equity

0.06

9988 HK 03/30/23 C85 Equity

1.42

9988 HK 03/30/23 P82.5 Equity

1.18

700 HK 03/30/23 C380 Equity

2.4

9988 HK 03/30/23 C87.5 Equity

0.7

700 HK 03/30/23 C390 Equity

1.08

9888 HK 12/28/23 C170 Equity

21.87

9888 HK 12/28/23 P170 Equity

32.75

US

Option Name

Last Price

BAC US 04/21/23 P23 Equity

0.52

DB US 04/21/23 P9 Equity

0.95

BAC US 04/21/23 C34 Equity

0.07

LAZR US 04/06/23 P6 Equity

0.22

TSLA US 03/31/23 C220 Equity

0.5

TSLA US 03/31/23 C200 Equity

3.58

BAC US 04/21/23 C30 Equity

0.41

TSLA US 03/31/23 P190 Equity

5.55

TSLA US 03/31/23 C210 Equity

1.35

TSLA US 04/06/23 C210 Equity

3.91

Edward Liu

Head

Tiffany Cheung

Product Specialist

Jenny Luo

Trader

Email

advisory@goldhorse.com.hk