Hang Seng Index advances as Meituan rally squeezes short-sellers, Alibaba slips on new investigation

Name: China’s economy expands record 18.3 per cent in the first quarter of 2021
Uploaded: 2021-04-20T02:43:19.000Z
Duration: 2 min 1 s
Description: China’s economy expands record 18.3 per cent in the first quarter of 2021

Stocks climbed from a four-week high after fluctuating between small gains and losses with focus on Alibaba and Meituan

President Xi stressed the need to further develop technology and improve healthcare cooperation at Boao Forum, while challenging US leadership

2-MIN READ2-MIN

People walk past a bank’s electronic board showing the Hang Seng Index near Central in Hong Kong. Photo: AP

Iris Ouyang

Published: 10:43am, 20 Apr 2021Updated: 5:12pm, 20 Apr 2021

Hong Kong stocks rose for a third day, lifting the benchmark to a four-week high as Meituan climbed after unveiling an almost US$10 billion fundraising. Alibaba Group Holding weighed on market sentiment.

The Hang Seng Index added 0.1 per cent at 29,135.73 at the close of Tuesday trading, after swinging between gains and losses. The gauge climbed to a four-week high on Monday. The Shanghai Composite Index fell 0.1 per cent to 3,472.94.

Meituan jumped 1.5 per cent to HK$293.60 after disclosing a plan to sell shares and convertible bonds worth US$9.6 billion to fund research and development in autonomous delivery vehicles, drone delivery and other cutting-edge technology.

Meituan short-sellers were squeezed after it emerged that Tencent Holdings, a 20 per cent owner of Meituan, agreed to subscribe for US$400 million worth of Meituan shares, according to people familiar with the top-up stock offering. A typical squeeze would prompt such investors to buy the stock to cover their bets.

Alibaba dropped 1.6 per cent to HK$228.20 after Shanghai-listed Minmetals Development said after market close on Monday that the Chinese government had started an investigation into the company’s joint-venture with the e-commerce group, the owner of this newspaper.

Meanwhile, mainland investors have plowed HK$26.1 billion in net buying of Hong Kong-listed stocks so far in April, according to stock exchange data, after withdrawing HK$12.7 billion in March. The inflows pale in comparison with the average of HK$124.3 billion in the first quarter and HK$67.2 billion in the fourth quarter last year.

02:01

China’s economy expands record 18.3 per cent in the first quarter of 2021

“The HSI lacks the momentum to rise when lacking the boost from southbound funds,” said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators. “The gauge will edge up after two to three months of horizontal price movement.”