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

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A businessman standing in front of an electronic board showing Chinese stock prices. Photo: Shutterstock Images

Published: 10:36am, 6 Jan 2023Updated: 5:20pm, 6 Jan 2023

Hong Kong stocks completed the best start to a year in more than two decades as investors embraced risk in China reopening playbook. Mainland Chinese developers surged after China announced more supportive measures to bail out the industry.

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.

The People’s Bank of China will allow local governments to lower mortgage rates for first-time house buyers if new home prices drop for three consecutive months, it said in a statement on Thursday. The directive added to a slew of policy accommodation since Beijing unveiled a 16-point plan in November to restore confidence in the local housing market.