HK stocks rally as buyers pile into Alibaba, JD.com after $97 billion tech rout while China pledges to temper wild swings

08-Jan-2022 Intellasia | TheStar | 5:02 AM Print This Post

Hong Kong stocks rallied for a second day, trimming losses in the week, as traders continued to load up Chinese tech companies on valuation appeal. Chinese market regulator also pledged to prevent wild swings in prices.

The Hang Seng Index added 1.6 per cent to 23,432.65 as of 3.20pm local time, narrowing the decline this week to less than 0.3 per cent. A late surge on Thursday lifted the market from near a 21-month low. The Hang Seng Tech Index advanced 1.6 per cent, and China’s Shanghai Composite Index fell 0.3 per cent.

Alibaba Group Holding, which owns this newspaper, surged 5.8 per cent while JD.com jumped 4.8 per cent and Tencent Holdings added 1.3 per cent. Kuaishou Technology, Bilibili and Baidu all gained by more than 2 per cent.

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“In the long run, technology growth is inevitable to realise ‘common prosperity’ and strengthen competition amid US-China tensions,” said Zhang Qiyao, an analyst at Industrial Securities. “The pullback in tech stocks was mainly due to the disruption from positions, sentiment and investment styles.”

Buyers returned after a sell-off that erased more than $97 billion of market value in technology stocks. Values emerged as the 64 members of the Hang Seng Index trade at a 3 per cent discount to their net asset value, according to Bloomberg data. Their price-to-book value has also slipped below 1 for 20 straight days.

Meanwhile, the China Securities Regulatory Commission aims to stabilise markers and prevent wild price swings after a rocky start in onshore and offshore Chinese stocks in the new year, state-run broadcaster CCTV said, its chair Yu Huiman.

Montreal-based BCA Research warned that there was a 70 per cent chance about a significant contraction in earnings for Chinese companies amid the economic slowdown, posing a threat to risk assets.

Chinese property developers rallied on speculation their mergers and acquisitions will be exempted from the stringent rules under Beijing “three red lines” policy, which caps leverage and debt-funded expansion. China Overseas Land and Investment surged 6.9 per cent and China Resources Land rallied 6.4 per cent.

Shimao Group bucked the rally on Chinese property stocks, tumbling 7 per cent after one of its units defaulted on a 645 million yuan (US$101 million) trust loan due December 25.

Software developer Beijing Sunway World Science & Technology jumped 109 per cent from the initial public offering price to 63.19 yuan on the first day of trading in Shenzhen. Jiangsu Yahong Meditech slumped 19 per cent on its Shanghai debut.

https://www.thestar.com.my/aseanplus/aseanplus-news/2022/01/07/hong-kong-stocks-rally-as-buyers-pile-into-alibaba-jdcom-after-us97 billion-tech-rout-while-china-pledges-to-temper-wild-swings

 

Category: Hong Kong

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