Hang Seng Index

Hong Kong stocks rise as President Xi commits to a more ‘open’ China in speech at Boao

PUBLISHED : Tuesday, 10 April, 2018, 9:12am
UPDATED : Tuesday, 10 April, 2018, 5:27pm

The Hong Kong stock market climbed on Tuesday, with gains led by the financial and property sectors, after President Xi Jinping said in a keynote speech in Boao that China was committed to further opening up its economy.

President Xi vowed to defend globalisation and urged the use of dialogue instead of confrontation to avoid “zero-sum games”, a possible reference to trade tensions between the United States and China.

“China’s door is opening up and will not be closed. It will only be opened up even further.”

The benchmark Hang Seng Index advanced 1.65 per cent, or 499.16 points, to 30,728.74, and the Hang Seng China Enterprises Index climbed 2.08 per cent, or 251.02 points, to 12,324.02.

“The markets are fine and will move higher. Neither side wants a trade war and everyone just wants to clear the uncertainty clouding the market,” said Brett McGonegal, chairman and chief executive of Capital Link Investment Holdings.

Gordon Tsui Luen-on, the managing director of Hantec Pacific and deputy chairman of the Hong Kong Securities Association, said: “An end to intense disputes between the US and China will bring a positive response to the market.”

Ping An Group climbed 5.04 per cent to HK$84.45. The Shanghai Securities News cited Guo Jinlong, a director at the Research Centre for Insurance and Economic Development, Chinese Academy of Social Sciences, as saying that Xi’s first-ever remarks of speeding up the opening of the insurance sector suggested that efforts to open up the economy will be even stronger.

Sunac China Holdings surged 14.33 per cent to HK$34.30, after broker BNP Paribas set a target price of HK$45.98 and said the Chinese property developer was winning market share while on track with the management’s plan to deleverage significantly.

Country Garden Holdings rose after announcing that the group achieved contracted sales of 187.97 billion yuan (US$29.79 billion) for the three months ending in March, up 24.8 per cent yearly. China Evergrande Group also climbed 5.70 per cent to HK$27.80.

The People’s Insurance Company Group, the parent of China’s biggest non-life insurer, rose 5.18 per cent to HK$3.86, after it said on Monday it plans to raise more than 10 billion yuan (US$1.59 billion) on the Shanghai Stock Exchange.

Other top gainers among big caps included China Merchants Bank, which surged 6.31 per cent to HK$33.70, Apple supplier Sunny Optical Technology (Group), which jumped 4.49 per cent to HK$158.20, and Geely Automobile Holdings, which increased by 2.99 per cent to HK$24.15.

Russian aluminium giant Rusal’s Hong Kong-listed shares fell further, by 4.78 per cent, to HK$2.19 after Monday’s nearly 50 per cent lost. The US levied its harshest sanctions yet against Russia on Friday.

Shares in Chinese sportswear retailer Pou Sheng International crashed 31 per cent to HK$1.38, after its privatisation plan failed. Another party in the proposed deal, Taiwanese footwear maker Yue Yuen International, sank 10.54 per cent to HK$28. Yue Yuen had planned to sell its 62 per cent stake in Pou Sheng and distribute a special dividend to its shareholders if the privatisation succeeded.

The mainland markets were generally firmer. The Shanghai Composite Index rose 1.66 per cent to 3,190.32, and the CSI 300, which tracks top-performing stocks in Shanghai and Shenzhen, climbed 1.93 per cent to 3,927.17.

The Shenzhen Composite Index reversed Tuesday’s earlier declines, finishing up 0.0.51 per cent at 1,841.22. The Nasdaq-style ChiNext Composite Index, however, stayed lower by 0.33 per cent, at 1,835.52.

The share prices of Chinese auto manufacturers, especially those with overseas partners, fell on concern that any lifting of foreign ownership limits would hurt their businesses. SAIC Motor, which makes cars with Volkswagen and General Motors in Shanghai, declined 2.24 per cent to 33.97 yuan. Guangzhou Automobile Group, which assembles passenger cars with Toyota Motors and Honda Motor, dropped 0.48 per cent on the Shanghai exchange to 20.69 yuan, and weakened 3.32 per cent in Hong Kong to HK$15.14.

Hainan-related stocks plunged after Xi did not mention the plan to set up a free-trade area on the island as expected. Hainan Strait Shipping, HNA Innovation and Hainan Haiqi all fell by the daily 10 per cent limit.