To The Moon

US-Iran Ceasefire: Oil Volatility vs. Risk Appetite

Brent surged to ~$99.35/bbl (+63.24% YTD), with back-months pricing a sustained Hormuz disruption premium while front-month prints hover near $94–$95. The $Cboe Volatility Index(VIX)$ climbed to 19.50 as US equities sold off ( $S&P 500(.SPX)$ -0.63%, $NASDAQ(.IXIC)$ -0.59%). For Hong Kong positioning, this creates a sharpened binary: failure = oil gaps toward $100+, energy names rally ( $CNOOC(00883)$ , $PETROCHINA(00857)$ , $CHINA SHENHUA(01088)$ reporting Friday) but broad risk-off pressures tech multiples; deal = oil relief, CNY strengthens, and growth/tech rerates. The $HSI(HSI)$ +0.48% resilience reads as regional catch-up under the KOSPI's record +2.72% close — not true decoupling from US risk-off.

China Policy: Currency Steady Signals

The PBOC delivered a stronger-than-expected fixing at 6.8594, signaling currency stability amid oil stress. Open market operations injected RMB 500mn via 7-day reverse repo at 1.4%, with DR007 at 1.40% — ample interbank liquidity. No MLF or LPR changes. The 10Y CGB yield at 1.757% (-7.89% MTD) continues to decline, pricing further easing ahead — equities should monitor for any surprise RRR cut if Q2 data weakens. USD/CNH at ~6.83 and USD/CNY at 6.8680 reflect managed stability, not devaluation pressure.

SH Connect Southbound

SZ Connect Southbound

Top 10 SH-HK Traded Stocks

Top 10 SZ-HK Traded Stocks

Southbound Flows: Rotation into SOE Value

Southbound flows accounted for ~40.3% of HKEX turnover. Net inflows rebounded to +HK$5.24bn from Monday's +HK$3.91bn. The flow distribution is instructive: $CHINA MOBILE(00941)$ (+HK$10.66bn), $ICBC(01398)$ (+HK$7.99bn), $CCB(00939)$ (+HK$7.89bn) led purchases, while $BABA-W(09988)$ (-HK$6.06bn), $TENCENT(00700)$ (-HK$1.78bn) led sales. This reflects active rotation from tech/growth exposure into state-owned enterprise dividend yield. The AH Premium Index at 117.44 (-0.70%) confirms H-shares are outperforming A-shares as the valuation gap compresses.

Positioning Implication

The setup remains constructive but bifurcated. Favor H-share laggards ( $HSCEI(HSCEI)$ -0.33% YTD vs. $HSI(HSI)$ +3.34%) on SOE dividend support — the China Mobile/ICBC/CCB cluster indicates sustained institutional conviction. Consider reducing tech beta ($Alibaba(BABA)$ , $TENCENT(00700)$ , $HSTECH(HSTECH)$ -0.08%) if southbound rotation persists and Hormuz risk escalates past Wednesday's deadline. Energy presents a tactical long opportunity into Iran talks; tech becomes a tactical underweight if Brent breaks above $100.

Earnings & IPO Calendar Highlights

April Highlights Calendar

The upcoming calendar is event-heavy and carries meaningful sector read-throughs.

• $NEW ORIENTAL-S(09901)$ is the first meaningful consumer discretionary print — watch tutoring demand trends and margin guidance for a pulse on mainland household spending confidence.

• $CHINA TELECOM(00728)$ matters for the SOE dividend narrative; any upgrade to payout ratios would validate the southbound rotation into telco yield.

• $CHINA SHENHUA(01088)$ and $CITIC SEC(06030)$ — Friday's energy + financials double-header will test whether commodity strength is translating to earnings beats and whether brokerages are capturing revived retail trading activity.

• $BYD COMPANY(01211)$ is the macro event of the week: EV delivery numbers, pricing power, and export momentum will determine if southbound capital can rotate back into growth or if the SOE trade has further to run.

• On the IPO front, $VGT(02476)$ and $HUAQIN(03296)$ will gauge risk appetite for new listings amid elevated volatility — weak subscription rates would flag broader sentiment fragility.

⚠️ Disclaimer: Commodity prices referenced herein are real-time and subject to fluctuation. This document is prepared for informational purposes only and does not constitute investment advice.