This Week: CHINAH reaches its highest level since Feb 2022!

 

• CHINAH index hits highest level since Feb 2022
   
• Tencent’s stock reaches highest level since July 2021
   
• Baidu drops 7%, despite AI announcements
   
• Investors await Alibaba, Baidu, and NetEase earnings
   
• Markets also pay attention to – HSBC earnings, restructuring plans in focus

 

Tech-heavy Chinese stock index – CHINAH have surged to its highest levels since Feb 2022!
 

A major factor driving today’s rise in the CHINAH index is Tencent’s launch of DeepSeek on WeChat, boosting its stock by 4% to its highest level since July 2021. As the 4th largest member of the CHINAH index, Tencent's gains are playing a significant role.

In contrast, Baidu has fallen 7% in Hong Kong. 
 

Investors are now looking to upcoming earnings reports from Alibaba, Baidu, and NetEase for insights into their AI strategies.

Meanwhile, HSBC, the largest component of the HK50, is also preparing to release its earnings. The HK50 index has rebounded 21.4% January lows.

 

Events Watchlist:
 

• Tuesday, Feb 18th: Baidu earnings (before US markets open)

China’s internet search giant, which also calls itself “a leading AI company,” only accounts for 0.5% of the HK50 and 0.7% of the CHINAH. However, these stock indexes may react to further AI hype coming out of Baidu’s earnings release, with its US-listed stocks previously forecasted to move 5.8% up or down post-earnings. For context, the Feb 14th announcement that Baidu will handle iPhone features in China, such as visual intelligence, may not necessarily translate into tangible future AI-fueled earnings. Additionally, Baidu’s Ernie AI chatbot will be made free for users starting in April. Despite these announcements, Baidu is currently down 7% in Hong Kong.

 

• Wednesday, Feb 19th: HSBC earnings (before European markets open)

HSBC is the heftiest member of the HK50, which tracks the benchmark Hang Seng index, alone accounting for 8.5%. With a new round of job cuts at its investment bank set to commence this week, investors will be eager to learn more about new CEO Georges Elhedery’s restructuring and cost-saving plans at Europe’s biggest lender.

 

• Thursday, Feb 20th: NetEase earnings (before US markets open)

While not directly linked to the AI-mania, NetEase is still a notable component of major Chinese stock indexes, accounting for 0.87% of the HK50, and 1.3% of the CHINAH. This video-gaming giant is expected to see its annual earnings return to growth in Q4 2024, with the predicted US-listed stock reaction being 6.9% up/down.

 

• Thursday, Feb 20th: Alibaba earnings (before US markets open)

Alibaba is the second-biggest member of the CHINAH and the HK50, with this single stock accounting for more than 8% of each index. Despite persistent concerns over Chinese consumer spending, bulls will be hoping that Alibaba’s AI roadmap will shine bright, given its recent tie up with Apple to roll out AI features in iPhones in China. Alibaba’s Us-listed stocks are forecasted to react with a 7.5% up/down move, which could greatly influence whether the CHINAH and HK50 indices can punch up to their highest levels since 2022.

 

 

Here’s a comprehensive list of other key economic data and events due this week:
 

Monday, February 17

• JPY: Japan 4Q GDP; December industrial production (final)
   
• SG20 index: Singapore January exports
   
• USDInd: Speeches by Philadelphia Fed President Patrick Harker, Fed Governor Michelle Bowman
   
• US markets closed
   

Tuesday, February 18

• AUD: RBA rate decision
   
• CHINAH index: Baidu earnings
   
• GER40 index: Eurozone, Germany February ZEW survey
   
• UK100 index: UK December unemployment rate; speech by BOE Governor Andrew Bailey
   
• CAD: Canada January CPI
   
• US30 index: Speech by San Francisco Fed President Mary Daly
   

Wednesday, February 19

• JP225 index: Japan January trade balance
   
• NZD: RBNZ rate decision
   
• CN50 index: China January home prices
   
• HK50 index: HSBC earnings
   
• ZAR: South Africa December retail sales; January CPI
   
• GBP: UK January CPI, RPI, PPI
   
• US500 index: FOMC meeting minutes
   

Thursday, February 20

• AU200 index: Australia January unemployment
   
• CNH: China loan prime rates
   
• TWN index: Taiwan January export orders
   
• GER40 index: Germany January PPI; Eurozone February consumer confidence
   
• HK50 index: Alibaba, NetEase earnings
   
• US30 index: US initial weekly jobless claims; Walmart earnings
   
• USDInd: Speeches by Chicago Fed President Austan Goolsbee, St. Louis Fed President Alberto Musalem
   

Friday, February 21

• NZD: New Zealand January external trade
   
• JPY: Japan January national CPI; February PMIs
   
• AUD: Australia February PMIs
   
• EUR: Eurozone February PMIs
   
• UK100 index: UK January retail sales; February PMIs
   
• MXN: Mexico 4Q GDP (final)
   
• US400 index: US February PMIs, consumer sentiment
  
   

HK50 CHINAH Alibaba Baidu NetEase HSBC Earnings RBA RBNZ UK CPI Japan CPI