Biden victory rally soothes market pain as Hong Kong investors look beyond Ant Group IPO stumble

Brokers optimistic that market gains sparked by Biden’s victory will consolidate and compensate for missed windfall

‘Ant IPO is only a one-off,’ market is now very positive on the macroeconomic conditions over the medium term: Royston Securities

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Hong Kong stock investors will look past the disappointment caused by the suspension of Ant Group IPO, some brokers say. Photo: Reuters

Published: 5:58pm, 9 Nov 2020Updated: 6:03pm, 9 Nov 2020

Some investors and brokers are optimistic that stock market gains sparked by the US presidential election outcome will continue apace over the coming weeks, erasing the pain of missing out on the anticipated windfall from Ant Group’s record-breaking stock sale.

The Hang Seng Index jumped 1.2 per cent on Monday on the back of Joe Biden’s triumph over the weekend, bringing the gains over three days to 4.4 per cent. The local market has not had a stronger back-to-back rally since the benchmark put on an 8.4 per cent run in four days through July 6, according to Bloomberg data.

Ant Group halted its record-breaking US$39.67 billion initial public offering on late November 3, sending the market down by 0.2 per cent the following day. Investors poured about US$3 trillion into its retail offerings in Shanghai and Hong Kong.

“Over the short-term, there is very bullish sentiment for investing on the mainland, due to the uncertainty over the US presidential election results are resolved,” said Alan Li, portfolio manager at Atta Capital. “The IPO suspension will have quite a bit of long-term impact, but you will not be able to see it over the short-term.”

Optimism surrounding Biden’s presidency helped drive the Hang Seng Index to a four-month high, a bullish trend that permeated across most Asian stock and currency markets. Global stocks reached a new height during Asian trading hours, according to Bloomberg data, and could swell further in European and US trading.

The Ant IPO has inadvertently played an important role in the market rebound, according to Kenny Wen, a wealth management strategist at Everbright Sun Hung Kai. Investors were able to latch on to the rally with the IPO refunds from the Chinese fintech giant.

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