Hong Kong stocks close up Wednesday led by Tencent and Chinese banks

Hang Seng recovers from last week’s losses

PUBLISHED : Wednesday, 16 August, 2017, 9:14am
UPDATED : Thursday, 17 August, 2017, 6:00pm

Hong Kong stocks inched higher on Wednesday as shares in the tech and banking sectors advanced, led by Chinese online giant Tencent Holdings.

The Hang Seng Index gained 0.86 per cent, or 234.11 points, to 27,409.07, while the H-shares index added 0.74 per cent, or 79.88 points, to 10,817.88 points. Turnover stood at HK$81.78 billion.

Gains were led by Chinese commercial banks as China’s official statistics showed total profit for commercial lenders climbed in the first half.

Shares of China Construction Bank went up 2.15 per cent to HK$6.60, while ICBC advanced 1.8 per cent to HK$5.65 and Bank of China gained 1.28 per cent to HK$3.95.

Traders are also speculating on a reserve requirement ratio (RRR) cut by China, as the central bank injected 399.5 billion yuan (US$59 billion) into the market via the mid-term lending facility (MLF) on Monday.

“There are a lot of buying orders for the state banks, ICBC in particular,” said Louis Tse Ming-kwong, managing director of VC Asset Management.

Investors are waiting for Tencent’s results which will be announced soon. The Chinese tech giant gained 1.38 per cent to HK$323.20 in today’s market.

Shares of Geely Automobile Holdings added 0.84 per cent to HK$19.16. The Hong Kong-listed Chinese carmaker said on Wednesday that its first-half profit jumped 128 per cent, thanks to sales of its sedans and sport utility vehicles.

Trading of China Unicom’s shares was halted in Hong Kong at the request of the company, as anticipation builds that its Shanghai-listed parent will announce new private-sector investors in line with the central government’s mixed-ownership reform programme of state-owned enterprises.

Hong Kong’s flagship carrier Cathay Pacific was due to announce its earnings around noon on Wednesday but the result announcement was postponed to after the market close. The carrier posted a first-half loss of HK$2.05 billion, its first interim loss in six years. Its stock advanced 0.86 per cent to HK$11.70 in today’s market.

Mainland China stocks saw mixed signals on Wednesday, with the Shanghai Composite lost 0.14 per cent or 4.81 points to 3,246.45, and the CSI 300 – which tracks the large caps listed in Shanghai and Shenzhen – decreasing 0.13 per cent or 4.64 points to 3,701.42. The Shenzhen Composite Index went up 0.59 per cent or 11.11 points to 1,898.39, while the tech-heavy ChiNext rose 1.48 per cent or 26.62 points to 1,825.19.

“Hong Kong and China markets are quite separated in a way,” said Kenny Tang ,director at Jun Yang Securities, explaining why the banks didn’t lift up the mainland stocks as much. “When investors are feeling promised about Chinese mainland banks, they might still want to buy shares of those banks in Hong Kong market.”

In Japan, Tokyo’s Nikkei 225 went down 0.12 per cent as the U.S. dollar recovered further against the yen.

Other major Asian stock markets gained ground on Wednesday. Australia’s S&P/ASX 200 gained 4.58 per cent and South Korean Kospi added 0.6 per cent today.

Overnight on Wall Street, the Dow Jones Industrial Average eked out gains for a third straight day, up 5.28 points, or less than 0.1 per cent, to 21,998.99.