Middle East Cool Off Heats Up Hong Kong, Week In Review

Week in Review

On Monday, Alibaba rose +1.68% following the release of its updated Qwen3 AI model, which is believed to power Apple AI on iPhones sold in China.
On Tuesday, Mainland investors bought the Hong Kong dip with $158 million of net buying via Southbound Stock Connect, which accounted for 53% of Hong Kong turnover.
On Wednesday, JD.com announced smartphone sales between RMB 4k and RMB 6k rose +50% year-over-year (YoY), while international sales via JD Global Sales rose by +236% YoY.
On Thursday, Alibaba announced that Tmall sales across consumer-subsidized products—including mobile phones, appliances, and digital goods—rose by +283% YoY.

Key News

Asian equities were mixed overnight following yesterday’s Trump’s Middle East escalation language, which sent risk assets down the elevator. President Trump appears to be giving the Iranian government time to negotiate. The US dollar was mixed versus Asian currencies, though the renminbi/CNY closed below at 7.17 as the PBOC kept the 1 and 5 Year Loan Prime Rate at 3% and 3.5% as expected.

Summer is officially here for traders as S&P and FTSE indices rebalance today, with the latter experiencing elevated volumes across the region as Hong Kong, South Korea, and India outperformed. FTSE’s decision to upgrade South Korea to developed markets creates a significant performance disparity from MSCI’s emerging markets index. Long MSCI EM and short FTSE EM would be a fun trade to play South Korea’s massive rebound.

Alibaba +1.55% was Hong Kong’s most heavily traded stock as the company saw its FTSE weight increase, as volumes doubled from yesterday. Alibaba announced 453 brands sold more than RMB 100mm worth of goods during the 618 (June 18^th) E-Commerce event. There was a lot of chatter about the government replenishing local government consumer subsidy funds after strong demand, which led to depletion in several cities. Horizon Robotics (9960 HK) fell by 1.86% despite being added to the FTSE indices, though the intraday chart shows the power of passive as massive block trades occurred at the close.

Competitor Unitree appears closer to an Hong Kong IPO after another funding round. Mainland-listed soy sauce maker Foshan Haitian Flavouring & Food Co. relisted on the Hong Kong Exchanges today after raising HK $10.1B ($1.3B). High flyer Pop Mart -3.62% was clipped. While Hong Kong had a strong day following yesterday’s debacle, Mainland China was off with index heavyweights such as banks, insurance, liquor, and telecom outperforming, which kept indices from falling further. Shipping and port stocks rebounded in hopes that Middle Eastern tensions would cool off. Otherwise, relatively quiet!

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