South China Morning Post
Advertisement
Advertisement
Hong Kong stock market
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
Wharf REIC, owner of the Times Square luxury shopping centre in Causeway Bay, has seen its stocks collapse due to coronavirus, which hurt tourism and local foot traffic. Its stock shot up Tuesday amid a rush of bargain hunting. Photo: Robert Ng
BusinessMarkets

Hong Kong stocks rally, with Wharf REIC jumping nearly 8 per cent and new economy stocks having another good day

  • New economy stocks including Tencent, Alibaba and Meituan Dianping climb in Hong Kong
  • Sentiment is overall positive, with city’s benchmark having posted back-to-back monthly gains
Hong Kong stock market
Iris Ouyang
Iris Ouyangin Shenzhen
Why you can trust SCMP

Hong Kong stocks rallied the most in two weeks on Tuesday, snapping a three-session losing streak as bargain hunters swooped in to pick up virus-battered Hong Kong property giants.

Wharf REIC, the owner of Harbour City and Times Square luxury shopping centres, surged 7.5 per cent after sinking to a record low on Monday. That was its biggest percentage gain in 11 months, according to Bloomberg data.

New economy stocks continued to advance, with Tencent climbing 2 per cent, Alibaba, the e-commerce giant and owner of the South China Morning Post, rising 3.3 per cent and food delivery giant Meituan Dianping jumping 8.7 per cent.

Mall owners have been especially hard hit in the real estate sector by the coronavirus, which worsened the already bleak picture caused by monthslong protests that discouraged mainland visitors to visit the city and reduced local foot traffic.

Wharf REIC was the top percentage gainer on the 50-member Hang Seng Index, which finished with a 2 per cent gain at 24,946.63, breaking a three-session losing streak. Overall, sentiment has been positive over the past two months, with gains posted in June and July on building excitement about new IPOs and a new tech board, both of which have attracted money into the city. Still, the benchmark is down about 12 per cent for the year.

“The market sentiment is relatively positive. The biggest risk for the Hong Kong market is still the rebound of local Covid-19 cases,” said Alan Li, portfolio manager at investment management firm Atta Capital.

Hong Kong-listed old economy stocks are coronavirus roadkill. Will they come back to life?

Other property stocks advancing included Hang Lung Properties, up 4 per cent, and New World Development, up 3.3 per cent.

A gauge measuring leading real estate stocks traded in Hong Kong had fallen 11 per cent in the past four weeks. The city’s property stocks have staged earlier rallies since the virus, only to see them peter out on lack of conviction amid the uncertainty about how long it will last. The city was essentially in a lockdown, as it combats a third wave, although new cases declined for a second day Tuesday to 80 new infections.

Investors were betting that local property stocks were oversold, said Louis Tse Ming-kwong, managing director of VC Asset Management.

“There’s an incentive and a good excuse for people to come in, seeing the situation improving, they must as well buy a dip,” he said. “We may not see the end of the tunnel yet, but it very much gave us inspiration and hope that the cases could slow down.”

The Shanghai Composite Index ended the day with a mere 0.1 per cent gain at 3,371.69, the highest level since July 14. Tuesday’s gains meant it has risen in six of the last seven sessions, and advanced a total 16 per cent in June and July. But the Shenzhen Component Index declined 0.8 per cent and the ChiNext board shed 1.3 per cent.

Kweichow Moutai, the liquor king of China that is one of the most popular stocks traded on the mainland-Hong Kong trading link, rose 0.1 per cent.

Also on the mainland, financial companies such as banks and insurance companies were the big winners as investors bet on the stocks after digesting the decision by Chinese financial regulators to postpone a new rule on asset management in the country by one year to the end of 2021. The Bank of Chengdu surged by the daily cap of 10 per cent. New China Life Insurance added 6 per cent.

More credit support from Beijing to keep jobs and bolster companies also boosted market sentiment in Hong Kong and the mainland, although traders expect a slowdown in stimulus in the rest of this year compared with the first half.

Additional reporting by Deb Price

Post