In today’s briefing:
- HK Strategy: Who Will Suffer the Most?
- Ohayo Japan | Markets Rediscover that Politics Matters
- Semiconductor WFE. China Retains #1 Spending Slot In Q225, US Mulls Yet Further Sweeping Sanctions
HK Strategy: Who Will Suffer the Most?
- Following Trump’s threats on tariffs and pull-out of meeting with Xi, the 5% collapse in the HSI futures implies a heavy sell-off in HK when the market reopens.
- The stocks with the best YTD performance and significant strengths in the last month are the prime candidates most vulnerable to the initial collapse.
- Semiconductor Manufacturing International Corp (SMIC) (981 HK), Kuaishou Technology (1024 HK), Alibaba (9988 HK), and Hua Hong Semiconductor (1347 HK) are badly exposed.
Ohayo Japan | Markets Rediscover that Politics Matters
- US-China tensions escalate: Trump threatens new tariffs; Beijing tightens rare earth export rules.
- Equities slump: Dow -2.2%, S&P 500 -2.7%, Nasdaq -3.6%. AI & politics weigh on Japan.
- NKY Futures -6% discount to cash. Luckily Japan on holiday on Monday.
Semiconductor WFE. China Retains #1 Spending Slot In Q225, US Mulls Yet Further Sweeping Sanctions
- Q225 WFE billing amounted to $33 billion, up 24% YoY and up 3% QoQ. China was the biggest spender with billings of $11.36 billion, +11% QoQ, albeit down 7% YoY
- A US select committee on China WFE spending, published on October 7 last, highlights multiple gaps with existing US restrictions on China WFE and proposes nine separate remedies
- Remedies include sweeping China country-wide bans, bans on related components, consumables & deploying “incentives & leverage” with allies so they follow suit. Still wondering about China’s surprise rare earth move?
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