Key Points- Selling in Hong Kong at one of its worst. Indiscriminate selling by institutional and individual investors. Pessimism will take time to dissipate, the Hang Seng will take time to bottom. Fleeting technical rebound will be difficult to trade.- Onshore market is no better. Foreign investors are reducing Chinese treasury. Onshore funds’ equity allocation uncomfortably high, and inconsistent with COVID resurgence, potential US sanctions and disappointing February credit growth. Be aware of contagion. The PBoC will act accordingly.- BUT forward points on the HKD suggest long-term confidence. Difficult case against HFCAA means accelerated return of US listed Chinese stocks. It will drain liquidity in Hong Kong near term, but China’s finest will eventually prove well worth it.Feb