Update | Hong Kong benchmark index hits 22-month high as Tencent retreats on technical correction
Casino operators advance, as investment banks upbeat on Macau’s gaming outlook
Tencent Holdings retreated from a record high on Tuesday, signalling a technical correction in the broader Hong Kong equity market.
Tencent slipped 0.1 per cent to HK$275.2 after touching a record high of HK$280.60 for a market cap of HK$2.64 trillion, and snapping a four-day winning streak. The stock price of the Chinese internet giant has risen nearly 50 per cent this year, with several investment banks, including Goldman Sachs and Credit Suisse, raising their forecasts for the company’s earnings outlook and upping price targets for the stock.
Software developer Kingsoft fell 0.5 per cent to HK$22 on Tuesday even though the company said its unaudited profits attributable to shareholders rose 78 per cent to 238.5 million yuan (US$34.6 million) in the first-quarter from a year earlier.
“People sold Tencent and other IT companies because they are technically overbought,” said Stanley Chan, director of research at Emperor Securities. “However, selling pressure isn’t that strong and the Hang Seng Index is likely to consolidate in a range of 25,000 and 25,600 in coming days.”
People sold Tencent and other IT companies because they are technically overbought
The benchmark Hang Seng Index edged up 0.1 per cent, or 11.81 points, to 25,403.15, its highest level since July 2015 though the pace of increases has slowed. The Hang Seng China Enterprises Index, known as the H-shares index, rose a modest 0.2 per cent, or 20.96 points, to 10,395.28.
Casino shares advanced amid analysts’ upbeat outlook on gaming revenues. Macquarie predicted Macau to post a 25 per cent year-on-year increase in May and was optimistic that the entertainment hub will be transformed into a world centre for tourism and leisure under the ongoing government support.
