The People’s Bank of China (PBOC) and the Central Bank of Turkey have renewed their bilateral local currency swap agreement. The agreement is valued at 35 billion yuan, equivalent to 189 billion Turkish lira, with a validity period of three years. It can be extended with mutual consent. Additionally, a memorandum of cooperation on establishing RMB clearing arrangements in Turkey was signed. This marks a new stage in financial cooperation between China and Turkey, facilitating cross-border settlements in local currencies and promoting bilateral trade and investment. As of May 31, 2025, the PBOC has signed similar agreements with 32 countries and regions, with an outstanding RMB balance of 81.8 billion yuan.
Surge in Southbound Fund Transactions
This week, southbound funds saw their highest transaction volume in nine weeks, reaching 640.38 billion Hong Kong dollars, a 56.36% increase from the previous week. The total net purchase volume was 15.457 billion Hong Kong dollars, up 3.55% week-on-week.
Among the most actively traded stocks, Xiaomi Group -W, Alibaba -W, Meituan -W, and Pop Mart each recorded transaction volumes exceeding 20 billion Hong Kong dollars. Tencent Holdings also saw a transaction volume of 18.834 billion Hong Kong dollars. Meituan -W had the highest net purchase amount of 3.605 billion Hong Kong dollars, despite a 2.47% drop in its stock price. Southbound funds have increased their holdings in Meituan -W for 18 consecutive trading days since May 2024, reaching a new high of 869 million shares.
Innovent Biologics received a net purchase of 1.903 billion Hong Kong dollars, with its share price rising 10.32%. The company has recently received rating upgrades and announced that its new drug marketing application for a combination therapy has been accepted by the National Medical Products Administration.
Significant Increase in Holdings
This week, 22 stocks saw their holdings by southbound funds increase by more than 10% compared to the previous week. The largest increases were in Yimai Sunshine, BYD Co., Ltd., and Zhonghuan New Energy, with growth rates of 116.02%, 40.38%, and 37.05%, respectively. Yimai Sunshine’s holdings doubled to 40.776 million shares, despite a 17.21% drop in its stock price. The company’s subsidiary acquired Zhongya Diagnostics, a third-party imaging center with over 40,000 patients annually. BYD’s holdings increased by 20.1881 million shares to 70.1799 million shares, the highest weekly growth since its Stock Connect program began. BYD Auto announced it would standardize supplier payment periods to within 60 days to support the healthy development of small and medium-sized enterprises.
Industry Distribution of Increased Holdings
Among the 22 stocks with more than a 10% increase in holdings, the consumer industry had the most stocks, with seven in total, including Cha Bai Dao, China Resources Beverage, and MAO Ge Ping. Healthcare and industrial sectors followed, each with five stocks.
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