HK stocks join global rally in best month since April 2015 as Lam’s policy address puts developers, airlines in play

27-Nov-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Hong Kong stocks advanced for a fourth day to approach a nine-month high as optimism about a global recovery fed appetite for riskier assets. The government will remove stamp duty on commercial property and expand the cross-border stock trading link in efforts to revive the economy.

The Hang Seng Index climbed 0.3 per cent to 26,669.75 at the close on Wednesday. The gauge surged as much as 1.7 per cent to the highest since February 25 before paring gains as a technical indicator flashed an overbought signal. The Shanghai Composite Index dropped 1.2 per cent.

The 50-member local benchmark has risen 10.6 per cent so far in November, handing investors their best month since a 13 per cent surge in April 2015.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

The rally reflects a bullish undertone across the Asia-Pacific region, with stock gauges from Japan to Australia recording gains. The Dow topped 30,000 points for the first time overnight while the S&P 500 Index also closed at a record. US President-elect Joe Biden’ began his transition into the White House, removing a drag on the market.

Globally, stock traders have started to price in a solid recovery outlook after three Covid-19 vaccine candidates made great progress this month during late-stage trials, even though new cases in the US and Europe are still on the rise. Hong Kong is facing a fourth wave of the pandemic, while sporadic new infections on the mainland have emerged in the biggest cities of Shanghai and Tianjin.

“Market sentiment remains underpinned by the trio of successful vaccine trials announced in recent weeks,” said Stephen Innes, a strategist at Axi. “Investors are simultaneously revelling in the drop in political existential risk premium now knowing the finishing touches on the US election process will not devolve in mobocracy as Joe Biden can start his formal transition to the White House.”

While pledging closer ties with the mainland to support the battered economy in the annual policy address, Carrie Lam Cheng Yuet-ngor, the city’s chief executive, also announced to cut the stamp duty for commercial properties and add Hong Kong-listed biotechnology to the Stock Connect programme. Meanwhile, companies trading on Shanghai’s technology-heavy Star Market will also be included to be available for trading by Hong Kong and overseas investors.

Henderson Land Development surged 3.2 per cent to HK$32.60 and China Overseas Land & Investment gained 3 per cent to HK$18.50. Swire Pacific, a major shareholder of Cathay Pacific Airways, rose 2.7 per cent to HK$47.

HSBC Holding rallied 6.5 per cent to HK$42.35, its highest close since March 31, on expectations that the UK-based bank will resume dividend payout amid the outlook of a global recovery.

China Petroleum & Chemical and CNOOC were among the biggest gainers in Hong Kong, rising at least 3.7 per cent as the expectations about a global recovery buoyed up crude oil prices. Crude futures held onto gains after a 4.3 per cent jump in New York to the highest level since March.

Xiaomi, China’s biggest smartphone maker, slid 3.7 per cent to HK$26.15 even after its third-quarter profit beat the consensus projections. Citigroup maintained a sell rating on the stock, citing the expectations about its positive outlook had been well reflected, and Daiwa Securities Group downgraded Xiaomi to hold from buy because of decreasing risk-reward.

In the mainland, Zhejiang East-Asia Pharmaceutical jumped by the 44 per cent daily cap from the initial public offering price to 44.83 yuan on the first day of trading in Shanghai.


Category: Hong Kong

Print This Post

Comments are closed.