Hong Kong’s Hang Seng Index rallies; Tencent gains after big slide over US targeting of WeChat
- Tencent climbs after being rattled by Trump move against WeChat
- Hong Kong’s benchmark breaks three-session losing streak
Hong Kong stocks rose, with the benchmark gauge capping the biggest advance in three weeks, as Sands China and other casino operators rallied after China resumed some travel visas to Macau.
The Hang Seng Index climbed 2.1 per cent, or 513.25 points, to 24,890.28 at the close on Tuesday. It snapped a three-day, 2.9 per cent decline sparked by the order of US President Donald Trump to ban the use of Tencent Holdings’ WeChat app.
Sands China shot up nearly 10 per cent, and Galaxy Entertainment Group advanced more than 5 per cent. Tencent rebounded 2.3 per cent before the release of its quarterly earnings on Wednesday. Meanwhile, Next Digital, whose owner Jimmy Lai Chee-ying was arrested a day earlier for suspected violation of Hong Kong’s new security law, more than tripled after its huge run-up Monday.
China’s Shanghai Composite Index fell 1.2 per cent to 3,340.29.
The resumption of some tourist visas is “a positive move for Macau, particularly when there are one and a half months until the National Day holiday,” said Qian Kai, an analyst at China International Capital Corp. (CICC) “A gradual relaxation of the travel restrictions is the key to the recovery of the gaming industry in Macau.”
The resumption of visa issuances to mainland Chinese tourists to Macau will first start in the southern city of Zhuhai on Wednesday, and a two-week quarantine requirement for those who return from the casino hub will also be scrapped, according to the Macau government. The travel ban was implemented in January to contain the spread of the coronavirus. Mainland tourists accounted for 71 per cent of the total number of visitors to Macau last year, according to CICC.
Sands China surged 9.8 per cent to HK$32.95, making the stock the best performer on the Hang Seng Index. Galaxy Entertainment climbed 5.5 per cent to HK$59.80 and MGM China Holdings added 4.9 per cent to HK$10.34.
Tencent climbed 2.3 per cent to HK$513.50 after falling 11 per cent over the past three days. Second-quarter profit probably increased 24 per cent from a year earlier, according to the estimate of analysts polled by Bloomberg.
Next Digital surged 331 per cent to HK$1.1, extending an 183 per cent rally on Monday. The stock reversed an intraday loss of as much as 17 per cent a day earlier as the detention of Lai sparked speculation that the company will become a target for back-door listings. Another possible reason for the surge in the stock was buying by anti-government protesters.
Geely Automobile Holdings rose 0.7 per cent to HK$16.88 after industry data showed that growth in China’s car sales accelerated to 7.9 per cent last month, adding to evidence of a sustained recovery in the world’s largest auto market.
Investors are also keeping a watch on the coming trade meeting between China and US, and the latest development in the tense relationship between the world’s two largest economies.
Top officials from Beijing and Washington will meet this weekend to review the implementation of the phase-one trade deal that took effect six months ago, Wall Street Journal reported.
China will sanction 11 US officials in retaliation for a similar move by Washington to punish Beijing over the issues of Hong Kong and Xinjiang, the foreign ministry said on Monday. The list did not include any member of the Trump administration.
