Hong Kong stocks flat as Xi delivers keynote speech at party congress
Mainland insurers advanced after the release of upbeat September sales data
Hong Kong stocks stayed virtually flat on Wednesday, even as Chinese insurers and property developers jumped. Mainland shares were mixed amid cautious trading after the Communist Party’s twice-a-decade national congress in Beijing kicked off.
The Hang Seng Index edged up 0.05 per cent, or 14.27 points, to 28,711.76, its fifth successive rise. The Hang Seng China Enterprises Index, known as the H-share index, gained 0.46 per cent, or 53.64 points, to 11,621.95.
Chinese developers rebounded from recent losses, led by Sunac which jumped 6.90 per cent to HK$39.50. Country Garden rose 3.57 per cent to HK$12.76 and Longfor Property added 3.02 per cent to HK$19.76.
Mainland insurers advanced broadly on the back of strong September sales numbers released on Monday. Several more earnings reports are due next week from companies including China Life and Ping An.
China Life, Wednesday’s best performing blue chip, rose 2.27 per cent after reporting a premium income of about 450 billion yuan (US$68 billion) for the first nine months, up nearly 20 per cent. New China Life Insurance jumped 4.49 per cent, and Ping An increased 1.93 per cent.
President Xi Jinping kicked off China’s five-yearly political event with an opening speech that lasted 3.5 hours. Xi set a target for China to become a leading global power by 2050, and emphasised key challenges including combating systemic risks, reforming state-owned enterprises, and better regulation of the financial sector.
In a research note, analyst Larry Hu at Macquarie Capital said President Xi’s decision not to mention a growth target in his speech hinted that top leaders are downplaying the importance of economic growth.
Redefining the Party’s goals, Xi’s said a core “contradiction” in China’s economy had emerged from unbalanced, inadequate development versus the people’s demand for a better quality of life. It is a notable change from the previous official statement, which said the main contradiction was one between low productivity levels and popular demand for higher living standards, Hu said.
“Such changes imply that top leaders are downplaying the importance of economic growth but raising the importance for things like wealth distribution, environmental protection and poverty reduction,” Hu said.
In any case, investors will probably continue to trade cautiously as they wait for the conclusion of the meeting on October 24, when the new standing committee of the Politburo is announced.
Shares traded on the mainland advanced on Wednesday. The Shanghai Composite Index rose 0.29 per cent, or 9.75 points, to 3,381.79, while the CSI 300, which tracks large companies listed in Shanghai and Shenzhen, added 0.80 per cent, or 31.09 points, to 3,944.16.
The Shenzhen Composite Index slipped 0.40 per cent, or 7.95 points, to 2,000.11, while the Nasdaq-style ChiNext Index dropped 0.47 per cent to 1,868.16.
“The market is in a wait-and-see mode today as we go into the party congress,” said Stanley Chan, director of research at Emperor Securities. “We are waiting for the congress to reveal details of a party leadership reshuffle and changes in future policies.”