Hong Kong, mainland China stocks post slight gains, as traders await reports on Tencent, economy later in week
- Shares of i-Cable Communications plummet 32 per cent after Hong Kong’s struggling pay-television provider announced ‘rights’ share plan to raise US$88.3 million.
Hong Kong and mainland stocks posted slim gains on Monday, as traders awaited significant data about China’s slowing economy later this week as well as third-quarter earnings from social media and gaming giant Tencent.
One notable stock, however, suffered steep losses in Hong Kong: i-Cable Communications, the struggling pay-television provider, plummeted 32 per cent after it announced it will add 6.35 billion so-called rights shares, doubling its number of shares in an attempt to raise US$88.3 million. Rights shares are offered to existing shareholders to inject money into a company; they in turn can sell the rights to the shares to other existing shareholders or investors in the broader market.
By around 2:30pm, Hong Kong’s benchmark Hang Seng Index had risen 0.09 per cent, or 22.47 points, to 25,624.39, while the Hang Seng China Enterprises Index edged up 0.06 per cent, or 6.19 points, to 10,437.65.
On the mainland, the Shanghai Composite rose 0.88 per cent, or 23.09 points, to 2,621.96. The CSI 300 of large caps was up 0.90 per cent, or 28.57 points, to 3,196.01, while the ChiNext gauge of smaller caps increased 2.82 per cent, or 37.31 points, to 1,360.14.
“The market was flooded with too much bad news from last week. So no bad news today means good news. The rise this morning shows that it is back to normal and gaining stability,” said Gordon Tsui, managing director of Hantec Pacific.
Ahead this week in China will be data on money supply and new yuan loans. On Wednesday, figures on retail sales, industrial output and fixed asset investment are due, while on Thursday data on new home prices will be released.
Traders will also be watching Tencent, which trades in Hong Kong and is down about 33 per cent since the beginning of the year, struggling amid a government clampdown on approval of new games. Tencent, which will report its third-quarter earnings on Wednesday, was trading down about 3 per cent, the most among blue chips. The company has been slashing its marketing budget for its gaming division.
The US-China trade war continues to be a drag on Chinese stocks.
But the blowout sales of US$30.8 billion for Alibaba’s annual Singles’ Day over the weekend underscored the power of the Chinese consumer.
Consumers needed less than two hours to purchase 100 billion yuan worth of goods, which took a total nine hours to achieve last year. Brands including Nike, Adidas, Apple and Xiaomi had crossed 100 million yuan sales mark in 30 minutes, while MAC sold out its 3,700 special edition lipsticks in one second. Alibaba owns the South China Morning Post.