Tencent’s record high props up Hang Seng Index as Xi Jinping’s Shenzhen speech fails to add fuel to China’s stock market rally

China’s benchmark stock indexes in Shanghai and Shenzhen fell, while the main gauge in Hong Kong was little changed after Xi Jinping’s keynote speech

Tencent Holdings, Shenzhen’s hometown champion, rose 3 per cent to a record, propping up Hong Kong’s Hang Seng Index and the China Enterprises Index

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A telecast of Chinese President Xi Jinping's Shenzhen speech shown in Hong Kong on Wednesday, October 14, 2020. Photo: Bloomberg

Published: 10:30am, 14 Oct 2020Updated: 5:40pm, 14 Oct 2020

President Xi Jinping’s keynote address in Shenzhen failed to fuel China’s stock rally, leaving the market short of a five-year high, as traders’ expectations were dashed by the lack of policy details from his speech. Shenzhen’s hometown champion Tencent Holdings rose to a record high, keeping key indices in Hong Kong in positive territory.

Shanghai’s Composite Index fell by 0.6 per cent while the benchmark on the Shenzhen exchange fell by the same percentage, and the CSI 300 index that tracks both markets fell 0.7 per cent. The three gauges were in negative territory throughout Xi’s nearly hour-long speech in Shenzhen.

On the Hong Kong exchange, the Hang Seng Index rose 17.4 points, or by 0.07 per cent, to 24,667.09, held up by a 3 per cent jump in Tencent’s shares. The China Enterprise Index, which tracks Chinese companies in Hong Kong, rose 0.4 per cent, also propped up by Tencent.

China’s market capitalisation rose to a record US$10.08 trillion on Tuesday in a rally stoked by expectations that Xi would unveil some sweeping measures to deepen the Chinese government’s economic reforms after 40 years of having Shenzhen as China’s special economic zone, which heralded the country’s experiment with market reforms and liberalisation. During his address, Xi heralded more reforms in the southern Chinese city, and urged local authorities to foster better integration of the Greater Bay Area to link Hong Kong, Macau with the nine cities in Guangdong province.

Shenzhen will continue its role as a pioneer in China’s economic reforms, being exposed to more autonomy and favourable policies that will power further opening-up and innovation, the Chinese president said.

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