Hong Kong and China shares wrap up trading week on a positive note, as investors cheer new foreign investment law
- Premier Li Keqiang signals more supportive measures for the mainland economy
- Hong Kong stocks close 0.6 per cent higher, while Shanghai Composite edges up 1 per cent
- Macau casinos advance as SJM Holdings and MGM China Holdings secure gaming license extensions
Hong Kong and China stocks wrapped up the final day of the trading week in positive territory, as investors cheered signals for more economic measures from Beijing and a new investment rule seen as helpful for facilitating a trade deal with the US.
The Hang Seng Index closed up 0.56 per cent, or 160.87 points at 29,012,26. Turnover for the main board was at HK$121.45 billion.
In the mainland, the CSI 300, which tracks blue-chip stocks listed in Shenzhen and Shanghai, rose by 46.52 points, or 1.26 per cent, to 3,745.01. The Shanghai Composite Index was up 1.04 per cent, or 31.6 points, at 3,021.75. Turnover for Shanghai was at 344.7 billion yuan (US$51.33 million).
In Shanghai, insurers led gains, as Ping An Insurance rose 1.44 per cent to close at 73.85 yuan and China Life Insurance rose 1.3 per cent at 28.75 yuan.
On Friday, National People’s Congress (NPC) lawmakers approved a draft of its new foreign investment law, sending the message that Beijing wants to level the playing field for overseas investors and reassure the global community it remains an attractive investment destination. The new law will come into effect January 2020.
The law was amended this week to make it clear that officials will be obliged to protect commercially confidential information they obtain from overseas businesses. The move comes amid attempts by Beijing to address key issues raised by US President Donald Trump as part of the US-China trade war negotiations that include forced technology transfer and market access.
Meanwhile, Premier Li Keqiang told reporters Friday as the NPC closed its annual session that Beijing will try to “provide effective support to the real economy”. Last week, Li set the GDP growth target for 2019 at 6 to 6.5 per cent, lower than the 6.6 per cent growth achieved for 2018.
“The gains in Hong Kong track closely with the momentum seen today in the A-share market, where everybody was reacting positively to the messages given by Premier Li this morning. For the short term, I see A-shares hovering at the current high levels but within a tight range,” said Ben Kwong Man- bun, a director at KGI Asia.
“But for the Hang Seng Index, I would expect at current levels there is more downside pressure in store from investors who would be attracted to take profit,” said Kwong.
In Hong Kong trade, Macau casino operators were higher, helped by news that two out of the six operators in the gambling enclave were granted extensions of their licence for a further two years.
SJM Holdings and MGM China Holdings said in filings that the Macau government had renewed their gambling licences for the period for 200 million patacas (US$24.7 million). Credit Suisse said as a result of the extensions, both operators would be able to add new mass gaming tables to their flagship casinos. Shares of SJM Holdings closed up 1.61 per cent at HK$8.83, while MGM China rose 3.54 per cent at HK$15.20.
Among other casino operators, Sands China rose 3.1 per cent to HK$38.3 and Galaxy Entertainment was up 2.62 per cent at HK$52.90.
But offsetting some of the blue chip gains, insurer AIA was down 0.32 per cent at HK$78.5. In the morning the company reported net profit for 2018 decreased by 60 per cent year on year to US$2.6 billion, missing a Bloomberg consensus forecast of a drop of 28 per cent.
Two trading debutants in Hong Kong ended mixed. Property-management services operator Binjiang Service closed at HK$7.32, up 5.17 per cent from its listing price of HK$6.96, while Heng Hup, a Malaysia-based scrap ferrous metal trader, closed at 37 HK cents, down 26 per cent from its listing price of 50 HK cents.
