Hong Kong stocks log best start to a year since 1999 as Alibaba, Tencent, Longfor fuel gains
- China’s central bank issued another directive to help restore confidence among homebuyers, fanning gains in mainland developers
- The Hang Seng Index reached a six-month high following a 6.1 per cent winning run this week
The Hang Seng Index rose 6.1 per cent for the week to 20,991.64 at the close of Friday trading, lifting the benchmark index to a six-month high. The Tech Index jumped 7.3 per cent from a week ago, while the Shanghai Composite Index added 2.9 per cent.
Alibaba surged 17.2 per cent during the week to HK$101.60 while Tencent jumped 10 per cent to HK$$349.40, while Baidu jumped 14 per cent to HK$127.30 as China signaled an end the regulatory crackdown on internet companies. Policy support also drove gains in developers Country Garden and Longfor, which both soared 13 per cent to HK$3.03 and HK$27.50, respectively.
The Hang Seng’s winning run of 6.1 per cent this week is the strongest start to a year since the benchmark rose 6.7 per cent in the first week of 1999, according to Bloomberg data.
“You can see they have at least changed their gesture, showed determination to support developers and softened their attitude on internet companies,” said Redmond Wong, a market strategist in Hong Kong at Saxo Bank. “But there are still a lot of structural risks such as economic slowdown” to deal with in the short term, he added.
The Hang Seng Index has risen almost 12 per cent since December 7, when China substantially abandoned its stringent Covid-19 control measures and began moves to reopen its borders. That helped restore more than US$350 billion of market value in the Hong Kong market.
“[China’s] economy, confidence, and activities will hopefully enter a stage of steady recovery” from the second quarter, and the equity market will enjoy a cyclical upturn, Bank of America’s China strategists including Winnie Wu said in a research note on Friday. Reopening is the key driver while the downside in the property market will be protected, they added.
Elsewhere, Sichuan Biokin Pharmaceutical debuted in Shanghai on Friday and surged 34 per cent to 37.65 yuan.
Markets in the Asia-Pacific region traded higher, with benchmarks in Japan, South Korea and Australia rising by 0.6 per cent to 1.1 per cent.