China got back to business Thursday following the Lunar New Year holiday.
Mainland shares were “supposed” to match record highs. And they did. Briefly.
But the CSI 300 couldn’t hold on. In what was variously seen as an underwhelming session, the gauge closed lower, while the ChiNext dropped nearly 3%.
Although the PBOC rolled 200 billion yuan in MLF, the central bank withdrew short-term cash. Just 20 billion yuan of short-term liquidity was offered Thursday, against 280 billion yuan in maturing seven- and 14-day funding.
While none of that points to a desire to see financial conditions tighten unduly, it doesn’t exactly scream “easy” either. Markets are still a bit unnerved following last month’s cash crunch (red in the figure).
Meanwhile, in Hong Kong, IPOs are going well. New Horizon Health, a cancer screening company, jumped 215% in its debut. That was the largest first-day gain for a Hong Kong IPO ever. By comparison, Alibaba rose 193% in 2007. New Horizon boasted a retail subscription rate of more than 4,000 times. That was the second-highest ever, apparently.
For some, that’s just more evidence of froth in global markets.
The Hang Seng did fall Thursday. But had it managed to post a gain, it would have marked the best winning streak since the halcyon days of early 2018, when the city’s shares were at the forefront of a global surge that ultimately dead-ended in the VIX ETN implosion stateside just a month later.
In a short piece documenting New Horizon’s debut, Bloomberg wrote that “first-time share sales have had their best start to the year on record in Asia… fueled by markets awash with liquidity, a stock rally, as well as hordes of retail investors bidding for shares.”