Looking at: 2-6 September 2024
Major data releases:
- 2 September: Caixin to release August Manufacturing PMI for mainland China
- 3 September: Hong Kong to report Q2 statistics on vessels, port cargo and containers
- 4 September: Caixin to release August Services PMI for mainland China
- 5 September: Taiwan to report August CPI
- 5 September: Taiwan to report August Import and Export Price Index
- 5 September: Taiwan to report August PPI
There will be no major economic data releases from mainland China to begin September. However, the Purchasing Managers’ Index (PMI) statistics from Caixin, which focuses on smaller private firms, also warrant attention as a supplement to the official government PMI data.
The Caixin PMI, compiled by the Caixin media group, is an indicator that uses a method similar to the official PMI of China’s National Bureau of Statistics but differs in sample size and survey scope. The Caixin PMI primarily focuses on small and medium-sized private enterprises in the eastern coastal areas, making it potentially more sensitive to changes in external demand. Over the past year, we have observed seven instances when there was a divergence between the two indices. Specifically, during these instances, the Caixin PMI consistently remained above 50 points – indicating an expansion in manufacturing – while the official PMI consistently stayed below 50, which suggests a contraction in factory output for the month. This gap had been widest at 2.3 points in June 2024.
We believe that the global manufacturing recovery and the growth of export orders contributed to this divergence, which also reflects the structural differences across domestic regions.
For stocks, the main indices of A-shares declined this week, with investors still favoring dividend-paying stocks. Trading volumes remained low as the market’s performance was influenced by the current economic slowdown and weak investor sentiment towards China. As of Thursday, 29 August, indices experienced a drop this week: the MSCI China Index dropped by 0.73 per cent, the Shanghai Composite Index fell by 1.14 per cent, the Shenzhen Component Index had decreased by 0.49 per cent, and the ChiNext Index declined by 0.25 per cent. However, on the same day, bank stocks and other high-dividend sectors also declined, indicating that the market’s risk appetite may be rising.
This piece has been co-produced with Skybound Capital (HK) Ltd, a unit of a global wealth management firm based in Hong Kong.
