Hong Kong Stock Exchange

Chinese tech companies gather momentum after electric car maker Nio surges 76pc in New York

Tencent builds on yesterday’s big gains, while BYD rises 8.2 per cent

PUBLISHED : Friday, 14 September, 2018, 1:20pm
UPDATED : Friday, 14 September, 2018, 5:12pm

Hong Kong-listed Chinese stocks closed higher on Friday, following a strong performance by China shares in the US led by electric car maker Nio and renewed hopes of US-China trade talks.

In Hong Kong, Tencent lifted the market higher. After surging 5 per cent on Thursday, the Chinese social media giant ended up 1.9 per cent at HK$330.00. Smartphone component suppliers AAC Technologies Holdings and Sunny Optical Technology (Group) climbed 5.5 per cent and 3.2 per cent, respectively. Xiaomi, the world’s fourth-largest smartphone maker, also advanced 1.7 per cent.

Meanwhile, BYD, China’s largest electric car maker, gained 8.2 per cent to HK$49.10.

The Hang Seng Index finished 1 per cent higher at 27,286.41, adding to a 2.5 per cent rise on Thursday.

Overnight on Wall Street, Chinese tech shares posted a broad surge.

Nio soared 76 per cent to US$11.60 on its second day of trading, after raising US$1 billion in its initial public offering.

Pinduoduo, an online group discounter, jumped 30 per cent to US$29.96. Momo, a social networking platform, and Weibo, the Chinese equivalent of Twitter, rose 6.7 per cent and 5.8 per cent each.

Alibaba Group Holding and Baidu gained 2.5 per cent and 1.7 per cent separately.

Clock’s ticking for China’s emerging electric car start-ups to raise capital as Nio goes public in the US

On Thursday, tech shares propelled US markets higher, as expectations rose over the prospect of a trade deal between the US and China and positive consumer data fuelled optimism about the US economic outlook.

Apple advanced 2.4 per cent, Alphabet and Microsoft both gained 1.1 per cent each. The Dow Jones Industrial Average closed above 26,000 for the first time this month. The S&P 500 rose for a fourth straight day. The Nasdaq Composite also rose 0.7 per cent.

A mix of news is being felt in both US and Hong Kong markets.

The Wall Street Journal reported on Wednesday Treasury Secretary Steven Mnuchin sent an invitation to China for a fresh round of trade negotiations later this month.

It was immediately followed by a response from Beijing on Thursday that the country “welcomes” a talk with the US to ease trade tensions.

Tencent continues share buy-backs for third day as stock languishes near year low on gaming concerns

“The market has been repressed for so long because of the tensions [between the US and China]. Because of that, when there was some optimism that the two countries could rekindle talks, stocks bounced back sharply,” said Stanley Chik, research director at Bright Smart Securities.

But Trump tweeted the US felt no pressure to make a deal with China.

The Wall Street Journal has it wrong, we are under no pressure to make a deal with China, they are under pressure to make a deal with us,” Trump said on Twitter on Thursday.

“Our markets are surging, theirs are collapsing. We will soon be taking in Billions in Tariffs & making products at home,” he added.

Sam Chi-yung, senior strategist for South China Financial Group, said the Trump tweet cannot be helpful to markets.

“The rhetoric by Trump has poured cold water on the cautious optimism in the market, casting doubt on a new round of trade talks [between the US and China],” he said.

Chik from Bright Smart suggested investors adopt a “less aggressive” approach and watch from the sidelines for progress on the trade war.