Alibaba surge leads Hong Kong stocks to biggest gain in 2 weeks
Hong Kong stocks are undervalued, and a ‘liquidity friendly environment’ is set to propel them higher, analyst says
The Hang Seng Index rallied 2.2 per cent to 25,617.42 at the close, registering the biggest advance since August 13. The Hang Seng Tech Index also gained 2.2 per cent.
Mainland stocks continued their solid run, with the CSI 300 Index rising 0.6 per cent and the Shanghai Composite Index adding 0.5 per cent. The stock market regulator gave an endorsement of the rally despite some signs of overheating. In a meeting with scholars and market professionals last week, Wu Qing, chairman of the China Securities Regulatory Commission, said that the stabilisation and uptrend in the stock markets would need to be further entrenched.
Affiliate Alibaba Health Information Technology advanced 7 per cent to HK$5.84. BOC Hong Kong Holdings rallied 6.7 per cent to HK$37.58 after first-half profit increased 11 per cent from a year ago.
Investors are turning their attention to Hong Kong stocks, the laggards after a recent upsurge in yuan-traded shares on mainland exchanges drove the Shanghai Composite up 8 per cent to a decade high last month. The CSI 300 Index, another benchmark of yuan-traded stocks, gained 10 per cent in the period, but the Hang Seng Index only added 1.2 per cent. The city’s benchmark is valued at 11.8 times earnings, compared with the multiple of 18.2 times for the Shanghai Composite Index, according to Bloomberg data.