Hong Kong Stock Exchange

Hong Kong stocks close just shy of record high on optimism over new share listings

Profit taking pulls the Hang Seng Index back at the end of the session after

strong gains in financials

PUBLISHED : Monday, 15 January, 2018, 9:16am
UPDATED : Monday, 15 January, 2018, 11:21pm

The Hong Kong stock market closed just short of a record high on Monday, as profit-taking pulled it back from earlier strong gains sparked by rises in financial firms and optimism over the possibility of more initial public offerings.

The Hang Seng Index closed down 0.23 per cent, or 73.67 points, at 31,338.87, just shy of its record closing high of 31,638.22 set on October 30, 2007. Its high for the day was 31,733.18, just below the intraday record of 31,958.41 also set on the same day in 2007.

The Hang Seng China Enterprises Index was little changed, up 1.49 points at 12,470.42.

“The market performance is a little bit choppy, mainly because mainland China market indices dropped in the afternoon so the Hang Seng followed this pattern,” said Stanley Chan, director of research at Emperor Securities.

“The market needs some consolidation at this level, because there have been huge accumulated gains in the past two months so there needs to be profit taking.”

Gains early in the session had been led by financials, with Ping An Insurance closing up 2.08 per cent to HK$88.20 after its online wealth management unit Lufax, the largest wealth manager in China, said it planned to file an initial public offering (IPO) application to the Hong Kong exchange at the end of this month, seeking a valuation of US$60 billion.

Other insurers were up alongside Ping An, with AIA Group gaining 0.1 per cent to HK$67.30 and Manulife adding 1.01 per cent to HK$169.80.

Optimism over the possibility of share offerings was also given a boost after the founder and chairman of e-commerce giant Alibaba Group Holding, Jack Ma Yun, said he would consider listing the firm in Hong Kong. Alibaba owns the South China Morning Post.

Will Lufax’s stock sale in April help Hong Kong in its race for the IPO crown?

Banks had the highest turnover of the day. China Construction Bank gained 0.77 per cent to HK$7.84, HSBC added 0.48 per cent to HK$84.10 and Bank of China (Hong Kong) rose 0.74 per cent to HK$41.

Internet giant Tencent briefly touched an all-time high of HK$448.8 before pulling back by noon and closing 2 per cent lower at HK$433.20.

Among other top gainers, casino operator Sands China jumped 5.52 per cent to HK$44.00, after CICC, China’s first joint venture investment bank, upgraded the stock to buy from hold and lifted its target price to HK$49.80 from HK$36 previously. Rival Galaxy Entertainment climbed 3.41 per cent to HK$62.20.

HKEX, the operator of the city’s stock market, lost 0.87 per cent to HK$272.40, shedding its earlier gains.

In mainland China, the Shanghai Composite Index ended down 0.54 per cent, or 18.45 points, at 3,410.49, while the large-cap CSI 300 Index was little changed at 4,225.24. The Shenzhen Composite Index fell 1.8 per cent, or 35.16 points, to 1,913.77, and the Nasdaq-style ChiNext index declined 3 per cent, or 53.08 points, to 1,732.62.

On Wall Street on Friday, major stock indices had finished at record levels as investors looked ahead to the start of the fourth-quarter earnings season. The Dow Jones Industrial Average ended up 0.9 per cent at 25,803.19, the S&P 500 added 0.7 per cent to 2,786.24 and the Nasdaq Composite gained 0.7 per cent to 7,261.06.