Chinese stocks regain US$1.7 trillion of value in November rally as Covid pivot, stimulus bets gain momentum

Name: Over one-fifth of China’s total GDP under lockdown amid record Covid surge, new report finds
Uploaded: 2022-11-30T02:56:39.000Z
Duration: 2 min 13 s
Description: Over one-fifth of China’s total GDP under lockdown amid record Covid surge, new report finds

The Hang Seng Index rose 27 per cent in November, the most since October 1998, with HSBC, Xpeng and developers powering the rally

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People standing next to the bull sculpture on the Bund in Shanghai. Photo: AFP

Zhang Shidongin Shanghai

Published: 10:56am, 30 Nov 2022Updated: 5:53pm, 30 Nov 2022

Hong Kong stocks advanced with gains in HSBC, carmakers and developers catapulting the city’s benchmark index to the biggest rally in 24 years. Bets on China’s exit from zero-Covid policy and other policy stimulus inspired risk-taking.

The Hang Seng Index rose 2.2 per cent to 18,597.23 at the close on Wednesday. The gauge soared 27 per cent in November, capping the biggest monthly gain since October 1998. The Tech Index rallied 2.8 per cent, while the Shanghai Composite Index completed an 8.9 per cent gain for the month.

HSBC climbed 2.2 per cent to HK$47.25 after the UK lender agreed to sell its Canadian business. Geely Automobile surged 11 per cent to HK$11.38 and hotpot restaurant operator Haidilao jumped 15 per cent to HK$19.12. Meituan added 5.3 per cent to HK$163.60 while carmaker BYD added 5.2 per cent to HK$191.50 and peer Xpeng rallied 16 per cent to HK$33.65 before its quarterly report card.

“The rebound still has momentum because we have seen some good developments in the property market and efforts to boost the vaccination rate,” said Zheng Xiaoxia, an analyst at Hua An Securities. “The market’s expectations about economic growth have been improving.”

Hong Kong’s stock market recouped US$808 billion in value in November through Tuesday, after Beijing eased some pandemic restrictions and unveiled measures to bail out cash-strapped developers. China’s onshore market recovered US$909 billion of capitalisation in the same period, according to Bloomberg data.

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Over one-fifth of China’s total GDP under lockdown amid record Covid surge, new report finds

HSBC also said it was “proactively” considering a one-time dividend or fresh stock buy-back. The London-headquartered lender’s dividend payout is an important focus for Hong Kong’s retail base, which historically has owned a large chunk of the bank.

“Certainly, we welcome they may consider to have a special dividend,” said Christine Fong Kwok-shan, a councillor for Hong Kong’s Sai Kung district, who has previously led local investors in trying to make claims against the lender for not paying dividends. The lender halted dividend payments in 2020 at the request of UK regulators.