To The Moon

1. China’s NDRC, Ministry of Finance, the PBoC, and tax administration had a televised meeting to announce measures to shore up the market and economy.

It stated that it would “strengthen policy reserve to release huge market potential.” It’s hard to make out what they really mean, although it could be interpreted that the government has ample policy tools at its disposal to get the economy growing at or even above its target. However, no details were given as to exactly what kind of policies would be used to stimulate the economy. It was another government announcement filled with positive tones and supportive language that didn’t give investors much to work with.

2. Mainland property developer Yuexiu Property $YUEXIU PROPERTY(00123)$ registered a 42% jump in July contracted sales of RMB 8.5 billion.

Total gross floor area grew 2.4% to 210,200 square meters, indicating that the company is selling a lot more higher-priced projects. The company also attained 68% of its full-year target by end-July, which puts it ahead of schedule. This may be signaling the beginning of a turnaround in China’s property market, but should be taken with a grain of salt. Other developers that have been caught up in the liquidity crunch in the industry haven’t fared as well, with China Vanke posting a 35% drop in July contracted sales. A smaller developer, China Overseas Grand Oceans Group, registered a 10% drop in contracted sales. It’s an uneven recovery at best, which is still favoring state-owned enterprise (SOE) backed developers like China Resources Land $CHINA RES LAND(01109)$ . $China Resources Land Ltd.(CRBJF)$ $Global X MSCI China Real Estate ETF(CHIR)$ $Country Garden Holdings Co., Ltd.(CTRYF)$

3. The gambling Mecca of #Macau, known as the Las Vegas of Asia, continues to recover unabated. Visitor arrivals in July averaged 89,000 a day, the highest since COVID19 began and 80% of pre-COVID levels seen in 2019.

In the first few days of August, daily arrivals have averaged 93,000, indicating the recovery remains intact and bodes well for the territory’s vaunted casino operators SJM Holdings, MGM China, Sands Macau, and Wynn Macau. But the Macao Government Tourism Office is looking to reduce gambling’s share of GDP from 51% to 40% in the future to reduce the over-reliance on an industry that could be subject to volatility depending on Beijing’s policies towards cross-border tourism and money flows. That means more investment by casino and hotel operators in non-gaming attractions, which should be bullish for construction in Macau. $Las Vegas Sands(LVS)$ $Wynn(WYNN)$ $MGM Resorts International(MGM)$ $SJM Holdings Ltd.(SJMHF)$

4. Hua Hong Semi $HUA HONG SEMI(01347)$ , one of China’s leading chip manufacturers, is set to debut on the Shanghai STAR Board on Monday, making it one of the few Hong Kong-listed stocks to also be traded in the tech-laden board launched nearly 4 years ago.

From just 25 listed stocks when the #STARboard launched in July 2019, there are now 550 listings on the exchange with a combined market cap exceeding $1 trillion, with another 934 companies in the registration process waiting to list. Listing on the STAR Board will give Hua Hong Semi another avenue to raise much-needed funds to pursue its expansion as part of Beijing’s goal to become self-sufficient in tech and insulated from the chip restrictions that are being hurled against it by the US and its allies.

5. China and Saudi Arabia are discussing cross-listing of exchange-traded funds on each other’s stock exchanges, further deepening the economic ties between the two nations.

This is significant for two reasons. First is that #SaudiArabia has the 10th largest stock market in the world with a market cap of $2.8 trillion as of May 2023. That provides another deep market to offer Chinese ETFs, giving investors in the wealthy Middle Eastern nation alternatives to invest in China. Second is that it gives Chinese investors a way to invest in companies like Saudi Armco, the world’s largest oil company at $2 trillion in market cap and one of the most sought-after blue chips. $KraneShares Bosera MSCI China A 50 Connect Index ETF(KBA)$ $iShares MSCI China ETF(MCHI)$ $KraneShares CICC China Leaders 100 Index ETF(KFYP)$ $iShares China Large-Cap ETF(FXI)$