Hong Kong stocks leap as investors eye China market reforms, stimulus
- China’s top stock market regulator Wu Qing unveiled fresh measures to reform Shanghai’s Nasdaq-style tech board, while pledging improved listing quality
The Hang Seng Index jumped 2.9 per cent to 18,430.39 at close, the biggest daily gain since March 12 when it rose 3.05 per cent. The Tech Index surged 3.7 per cent but the Shanghai Composite Index declined 0.4 per cent.
China’s top stock market regulator Wu Qing unveiled fresh measures to reform the technology board, or the Star Market, and said the overhaul would focus on underwritings, mergers, stock incentives and trading to promote tech innovation, during his keynote speech at the two-day Lujiazui financial forum.
That added to the optimism after Wall Street’s rally overnight took the S&P 500 and Nasdaq to new peaks propelled by the artificial intelligence (AI) mania which made Nvidia the world’s most valuable company.
AI-related stock Lenovo Group jumped 9 per cent to HK$12.08. Morgan Stanley analysts say Lenovo is likely to be the main beneficiary of the AI PC boom in Asia. HSBC estimated Lenovo’s AI PC penetration rate to rise and upgraded its target price to HK$13.5 from HK$11.7, according to a note in May. Chinese AI chip maker Sensetime surged 6.7 per cent to HK$1.43.
“The reforms announced at the Lujiazui Forum today are conducive to foreign funds entering the stock market as policy measures focus on protecting the rights and interests of investors and on improving the quality of listed companies,” said Jason Chan, senior investment strategist at Bank of East Asia.
The policy emphasis on the development of China’s technology sector is also beneficial to the technology sector and to AI-related stocks in Hong Kong, he added. Smartphone maker Xiaomi advanced 6.3 per cent to HK$18.48, while Bilibili soared 19 per cent to HK$144.3, after its new gaming title received positive market feedback.
But the Star Market, fell 0.7 per cent after the announcements at the Lujiazui forum. Investors are potentially worried about the “tightening supervision of listed companies and the pressure to delist”, according to Chan.
Geely Automobile jumped 3.9 per cent to HK$9.23 after HSBC said Geely’s last month sales were better-than-expected, supported by a strong EV product cycle. Chinese developer Longfor added 4 per cent to HK$12.02 following its annual general meeting on Tuesday, in which the developer said it has been steadily lowering overall debt levels, helped by positive net cash flows.
Traders are optimistic about further policy support as the world’s second-largest economy remains under pressure amid patchy economic data unveiled earlier this week.
“In China, regulatory policies announced in May and June have generally been favourable for the property sector, as the country prioritises efforts to end a slump that has burdened the economy for the past three years,” said Daniel Tan, portfolio manager at Grasshopper Asset Management.
Other key Asian markets broadly advanced. Japan’s Nikkei 225 gained 0.2 per cent and South Korea’s Kospi rose 1.2 per cent, but Australia’s S&P/ASX 200 dropped 0.1 per cent.
