Why China A-share Lagged Hong Kong Recently?

Also thoughts on Ant Group, Alibaba and New Oriental

Key Takeaways

• Domestic investors continue to be disappointed by the delayed interest rate cuts in China.

• Given the strong recovery in new loans, PBoC is poised to initiate more rate cuts. China A-shares will eventually catch up with Hong Kong stocks.

• For high dividend yield stocks, the A-shares will trade very differently from the H-shares given the difference in risk free rates.

• Don’t give up hope on Ant Group yet. I still believe China need a solution to the delayed IPO asap. Just that it won’t as simple as what the media portrayed.

• The live-streaming sales event of New Oriental was impressive. Some of the video clips went completely viral this weekend. However, this is not enough for a successful turnaround of the company.