Tencent, Geely Auto power Hong Kong stocks to third day of gains

PUBLISHED : Tuesday, 08 August, 2017, 9:10am
UPDATED : Tuesday, 08 August, 2017, 10:24pm

Hong Kong stocks rose for a third consecutive trading day on Tuesday, pushing the Hang Seng Index to its highest level since May 2015, as Tencent and Geely Automobile advanced.

The Hang Seng Index added 0.6 per cent, or 164.55 points, to 27,854.91 at the close, the highest since May 27, 2015. The Hang Seng China Enterprises Index added 0.2 per cent, or 25.38 points, to 11,079.79. Mainland China’s equity benchmark ended 0.1 per cent higher, with a gauge tracking ChiNext small-caps rising to a three-week high.

The Hang Seng Index’s 27 per cent gain this year is the best among Asia’s major markets as investors from the mainland and overseas have been snapping up equities in the city due to cheaper valuations and the Hong Kong dollar’s peg to the greenback.

“We see a bunch of technology companies’ shares move up as the market sentiment continues to be lifted by strong gains in Tencent in particular,” said Kingston Lin King-ham, director of AMTD securities brokerage.

Technology heavyweight Tencent extended its winning streak on Tuesday, closing up 2.5 per cent to HK$328.60. The company is due to report its interim results on August 16.

Hong Kong-based AAC Technologies added 1.6 per cent to HK$112.20. The Apple supplier was accused of “dubious accounting” by short-seller Gotham City Research in May, after which hacktivist group Anonymous Analytics backed up AAC and rated the firm a strong buy.

Geely Automobile was among the biggest winners on the Hong Kong bourse, adding 6 per cent to HK$19.66 after news that Sweden’s Volvo agreed to share engine technology with the Zhejiang-based car maker, according to Reuters.

We see a bunch of technology companies’ shares move up as the market sentiment continues to be lifted by strong gains in Tencent in particular
Kingston Lin King-ham, director of AMTD securities brokerage.

On the mainland, the Shanghai Composite Index rose 0.1 per cent, or 2.1 points, to 3,281.87. The Nasdaq-style ChiNext gauge gained 1.7 per cent to 1,762.42, the highest close since July 14, as state buying boosted sentiment for smaller companies.

Xuanhua Construction Machinery led the gains among stocks linked to the Xiongan New District after media reported that the Hebei provincial government set up an investment arm for infrastructure construction in the special economic zone near Beijing. The stock surged by the 10 per cent daily limit to 29.22 yuan.

Jointo Energy Investment jumped 10 per cent to 11.75 yuan and Tangshan Jidong Cement, the biggest maker of the building materials in Hebei, rose 2.2 per cent to 18.39 yuan.

ChiNext-listed Zhejiang Huace Film & TV soared 10 per cent to 12.76 yuan in Shenzhen, extending a rally after China Securities Finance bought the stock in the second quarter to become the company’s fifth-largest shareholder.

Five Jingxi executives plan to profit-take after shares rally off the back of blockbuster Wolf Warriors II

The ChiNext index has already rebounded 6.4 per cent from a 31-month low recorded in July and the gauge is now trading close to its cheapest level against big-cap shares on a valuation basis.

Beijing Jingxi Culture & Tourism slumped 9.8 per cent to 19.07 yuan after the producer and distributor of hit movie Wolf Warriors II said five executives plan to cut their stakes in the company. The stock had rallied 60 per cent over the past two weeks after the action movie, which is still on theatrical release, raked in a record 3.39 billion yuan (US$506 million) in box office takings as of Monday night.

Gains on the broader market were also limited after China’s customs administration released July data on foreign trade on Tuesday. Exports rose 11.2 per cent from a year earlier in yuan terms, while imports increased 14.7 per cent to leave a trade surplus of 321.2 billion yuan. But both inbound and outbound shipments fell short of economist projections in a Bloomberg survey.