Hong Kong Exchanges and Clearing soars to become world’s largest exchange operator by market cap
- Hong Kong’s tech stocks shoot up on news of Ant listing plan, new Hang Seng Tech Index
- HKEX, the city’s exchange operator, surges 9.8 per cent – the most in five years
Hong Kong’s stocks were on fire Tuesday, with the exchange operator’s shares surging to make it the world’s largest exchange operator by market capitalisation, following Ant Group’s plan to list in the city and Shanghai.
The Hang Seng Index added 2.3 per cent, or 577.67 points, to 25,635.66 at the close for its biggest gain since July 6.
Sentiment got a boost from overnight trading, where the S&P 500 index turned positive this year and the Nasdaq market rose to a record on strength from Amazon.com and Zoom Technologies. European stocks also advanced, as top leaders were close to clinching a stimulus package that could be worth as much as 750 billion euros (US$858 billion) to battle the economic dislocation of the coronavirus pandemic.
On the virus front, a vaccine that is being developed by the University of Oxford and AstraZeneca Plc showed promising results in early human testing. China’s CanSino Biologics Inc. and a partnership of Pfizer Inc. and BioNTech SE also delivered positive trial updates.
“Ebullience around positive vaccine and the recent round of robust macro data continues to float markets in rough seas,” said Stephen Innes, a strategist at AxiCorp. “The fear of the virus is less than it was, so the economic beat down is expected to be less this time around.”
Alibaba, which owns the South China Morning Post, jumped 7.3 per cent to HK$257, just less than 2 per cent shy of the record close set two weeks ago.
Ant Group, which operates the Alipay online payment platform for the world’s largest e-commerce company, is still discussing the size and timing of the share sale, but the outcome is likely to be one of the largest initial public offerings in years. Analysts are valuing the provider of the Alipay service at more than US$200 billion, higher than China Construction Bank and just short of Bank of America’s market capitalisation.
Tencent Holdings, the Chinese social media giant, rallied 7.9 per cent to HK$564. JD.com, the e-commerce company that rivals Alibaba, added 5.1 per cent to HK$254.20 and Meituan Dianping, China’s biggest online platform of booking and food delivery, advanced 8.8 per cent to HK$205.
Alibaba and Tencent will be the biggest constituents on the Hang Seng Tech Index, which will start on July 27, with Meituan, Xiaomi and Sunny Optical Technology Group also among the top five, according to the index compiler. The gauge will include the largest 30 of 163 tech companies listed in the city.
Meanwhile, Moody’s Investors Service raised the 2020 earnings estimates for China’s internet companies by as much as 10 per cent, citing more time and money consumers spend online during the pandemic. The rating service firm said that carmakers and energy producers were the hardest-hit industries, cutting their earnings projections by between 15 per cent and 30 per cent.
CanSino Biologics added 1.7 per cent to HK$211. The firm, which is co-developing a vaccine with the military-affiliated Beijing Institute of Biotechnology, published the results of its phase-two trial on Monday and said that the candidate is safe and has induced “significant” immune responses in most of the recipients after a single immunisation.
Additional reporting by Eric Ng.