Alibaba, Tencent power Hong Kong stocks as China ends fintech clampdown while reopening boosts Macau casino outlook

Gains added to the Hang Seng Index’s best start to a year since 1999 as Alibaba Group led tech winners
The rectification in the financial businesses of platform companies ‘has basically finished’, CBIRC boss Guo Shuqing says, following a reorganisation at Ant Group

Hong Kong stock market

Mia Castagnone

Published: 10:24am, 9 Jan, 2023

Why you can trust SCMP

Hong Kong stocks rose, adding to the market’s best start to a year since 1999, as Alibaba Group Holding surged on signs regulators have ended their clampdown on technology companies and China’s reopening pace continued to surprise investors.

The Hang Seng Index jumped 1.9 per cent to a six-month high of 21,388.34 at the close, following a more than 6 per cent rally in the opening week of the year. The Tech Index added 3 per cent, while the Shanghai Composite Index gained 0.6 per cent.

Alibaba surged 8.7 per cent to HK$110.40, while Tencent Holdings climbed 3.6 per cent to HK$362.00 and Baidu added 3.2 per cent to HK$131.40. Macau casino operators Sands China and Galaxy Entertainment added 3.7 per cent and 4.2 per cent, respectively, as China dismantled quarantines for arrivals and officially ended its zero-Covid policy.

Ant Group, in which Alibaba owns a one-third stake, announced on Saturday changes to its shareholding structure that effectively loosened co-founder Jack Ma’s control of the consumer-financing giant. The internal reorganisation follows months of antitrust actions against internet platform operators, and may pave the way for the revival of Ant’s jumbo stock offering.

“Investor sentiment should benefit from a more pro-growth policy orientation,” Goldman Sachs said in a report to clients on Monday. This is “partly reflected by the sharp Covid policy pivot, but more broadly, by concrete policy loosening actions and market-friendly government rhetoric centering on the digital economy, the housing market and the private economy.”

Jack Ma gives up control of Ant Group in crucial restructuring

Elsewhere, the rectification of the financial units of platform companies “have already basically finished,” Guo Shuqing, chairman of China Banking and Insurance Regulatory Commission, said in an interview with state-run Xinhua News Agency. It will normalise regulation, encourage platform operators to “fully display their capabilities in bolstering growth, job creation and global competitiveness,” he added.

The first day of China reopening on Sunday saw as many as 45,000 people crossing the Hong Kong-mainland China border on either direction at four land ports and one ferry terminal, according to provisional immigration figures.

Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission. Photo: Simon Song

Foreign investors bought US$3 billion worth of onshore stocks in the first week of the year, the US bank said, compared with US$2.6 billion in the first week of 2020 before the pandemic outbreak. Mainland Chinese funds purchased US$1.4 billion of Hong Kong-listed stocks, versus US$1.1 billion in the corresponding 2020 week.

Stocks were also lifted by better sentiment in the US as traders bet the Federal Reserve will temper its current phase of policy tightening. A job report on Friday showed unemployment fell back to a pre-pandemic low of 3.5 per cent while wage growth cooled, boosting confidence the economy can avert a recession.

03:47

First travellers arrive and depart from Beijing as China reopens international borders

One company started trading on Monday. Fenbi, an education services provider, rose 12.1 per cent to HK$11.10.

Markets in the Asia-Pacific region traded stronger with the benchmark in Australia adding 0.6 per cent while the Kospi in South Korea jumped 2.6 per cent.

Additional reporting by Iris Ouyang and Li Jiaxing

Post