asian equity markets were mixed overnight as growth stocks outperformed in the region the growth stock and growth sector outperformance occurred in hong kong and taiwan hong kong internet stocks had a decent day led by alibaba hk 121 and jdcom hk 269 less tencent 012 despite their continued buyback in the mainland market growth stocks were strong as solar stocks ripped such as sungrow 909 and trina solar 773 on policies supporting new construction utilizing solar panels the ev ecosystem had a good day in both hong kong and china on the other hand value stocks had a terrible day in both hong kong and china the financials and real estate sectors were the worst performers in both markets and were off on concerns that apartment buyers of unfinished buildings are not paying their mortgages there are 160 such projects across sixteen provinces mainly in lowertier cities the actual liability isn’t the end of the world for any bank involved though investors shot firstasked questions later the situation has gotten the attention of the pboc which is apt to put the issue to bed bloomberg news is saying a significant infrastructure stimulus is coming though i’m not seeing anything on this if true maybe the focus is on getting these complexes built the other sector that had a challenging day in both markets was the utilities sector led lower by electric companies the culprit is the significant heat wave occurring in china combined with less rainfall which hurts hydroelectric companies there were two developments overnight in us adr delistingholding foreign companies accountable act news 1 the wsj interviewed gary gensler stating that a solution might not be found i would chalk that comment up to negotiating 101 as discussions are coming up 2 our friend marcel noticed a bloomberg news article that included comments from california congressman brad sherman one of the architects of hfcaa sherman stated that a solution is apt to arise “until a little after the last minute” bloomberg writes “he predicted beijing would ultimately pull some “strategic” companies off us exchanges but would likely cooperate with the us public company accounting oversight board to avoid the delisting of scores of other chinese stocks” this aligns with our view that soes should be delisted as their audit reviews might have sensitive information the private companies have nothing to hide so let them adhere to the pcaob’s global standard our conservative approach to holding hong kong share classes over the us adrs is aligned with the potential for a lastminute solution hopefully the two sides can put this issue to bed i recognize a lot of concern about china reentering fullscale lockdowns how can you stay on top of this go to hong kong disneyland and shanghai disneyland this concern isn’t a problem as long as you can book hotels there are cases of covid in hong kong and china but we don’t see citywide lockdowns we see districts neighborhoods or apartment buildings go into lockdown not entire cities the hang seng and hang seng tech diverged by 022 and 089 on volume 408 from yesterday which is 80 of the 1year average 245 stocks advanced while 225 declined hong kong short sale turnover declined by 719 from yesterday 84 of the 1year average while short sale turnover accounted for 17 of hong kong volume growth factors outperformed as value factors had a rough day while small caps outperformed large caps the top sectors were healthcare 404 discretionary 128 and tech 087 while financials 253 utilities 222 and real estate 156 the top subsectors were ev and ev battery related such as lithium charging and fuel cell along with auto while liquor wind cobalt and electric plants were among the worst southbound stock connect volumes were light as mainland investors bought tencent small while selling meituan small shanghai shenzhen and star board diverged 008 079 and 228 on volume 936 from yesterday which is 95 of the 1year average 2435 stocks advanced while 2023 stocks declined growth factors significantly outperformed value factors today while small caps outperformed large ones top sectors were healthcare 135 industrials 129 and tech 077 while utilities 281 real estate 222 and financials 215 top subsectors solar and ev battery related such as lithium and catl’s suppliers while electrical utilities hydropower plants and real estate companies were among the worst northbound stock connect volumes were moderate as foreign investors sold 135mm of mainland stocks treasury bonds rallied while cny eased 044 to 674 and copper slipped 069