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Stocks Blog: Hang Seng Index rises on China's pledge to liberalise banking industry

  • Trading resumes on the Hong Kong stock exchange after a one-day break to mark Labour Day, while the markets of Shanghai and Shenzhen remain closed for through the remainder of the week
  • The Hang Seng Index rose in Hong Kong, while the China Enterprises Index, which tracks the performance of Chinese companies, dipped
Topic |   Stocks Blog
An investor in a brokerage. Contrary to global conventions, China uses red to denote advances and gains, and illustrates losses and declines in green.
INTRODUCTION

Trading resumes in Hong Kong's stock market after a one-day break to mark Labour Day, while the exchanges of Shanghai and Shenzhen remain closed for the remainder of the week. The Connect cross-border investment channel also remains closed.

The month that ended saw the final slew of corporate earnings from Chinese companies for the first three months, and what a quarter it was: Chinese companies
had their worst annual earnings season ever
, with a record 452 out of 3,602 public companies incurring annual losses, as the effects of the year-long US-China trade war seeped into corporate earnings. 

One piece of good news that came over the Labour Day holiday was China taking another step in opening its US$44 trillion financial sector to the world, unveiling plans to remove ownership limits in local banks, in keeping with its World Trade Organisation commitments. Hong Kong's benchmark Hang Seng Index rose, paced by gains in banks and insurers who stand to benefit from China's liberalisation of the financial services industry. The Hang Seng China Enterprises Index, which tracks the performance of Chinese companies traded in Hong Kong, declined as Chinese banks would face stiffer competition with foreign entities with the nation's banking liberalisation.

-- Yujing Liu and Eugene Tang in Hong Kong