Hong Kong, China stocks rise as Shanghai tech board kick-off signals further capital market liberalisation
- Hang Seng Index rises by 1.4 per cent, its highest close since June 20
- Liquor distillers lead stocks higher in China, with Kweichow Moutai rising to market cap exceeding 1 trillion yuan once again
Equities rose in Hong Kong and China on Monday, as investors await the introduction of a bidding process that will allow technology start-ups to raise capital in Shanghai, another step in the liberalisation of mainland China’ equity markets.
The Shanghai Composite Index gained 2.5 per cent, or 74.67 points, to 3,096.42 at the close, while the benchmark in Shenzhen added 2.7 per cent to 1,685.79.
In Hong Kong, the Hang Seng Index rose by 1.4 per cent, or 396.75 points, to 29,409.01 for its highest close since June 20, while the China Enterprises Index, which tracks the performance of Chinese companies, or H shares, on the exchange, climbed 1.5 per cent.
Shanghai’s stock exchange, which was ordered by Chinese President Xi Jinping in November to open a new board for technology start-ups, will accept submissions for initial public offerings from Monday, according to Beijing-based media group Caixin.
Sentiment was also buoyed by traders ramping up buying of companies that are expected to report solid first-quarter earnings. A total of 371 mainland China companies will release their earnings this week, according to data compiled by Bloomberg.
“We are in the middle of the earnings season, so the market is now returning to corporate fundamentals,” said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai. “Chinese traditional liquor producers are the ones that are seen by investors as the safest bet in terms of earnings.”
