China’s second-largest short video platform operator jumped by as much as 11 per cent to HK$93.50 on Thursday before paring gains to 5.2 per cent. The stock was added to the southbound channel – buying of Hong Kong stocks by mainland investors – of the Stock Connect with Hong Kong
on Thursday, according to a statement posted by the Shenzhen exchange.
Buying sentiment was strong, with the amount of Kuaishou shares that changed hands being almost 50 per cent above the 30-day average, based on Bloomberg data. The volume signalled that mainland Chinese investors might have snapped up the shares that have tumbled by 72 per cent this through Wednesday since their debut on February 5.
The uptick was part of a broad-based rally in battered Chinese technology stocks in Hong Kong. The Hang Seng Tech Index has rebounded
by 15 per cent from a nadir on August 20, when the gauge’s price-to-earnings ratio slipped to a record low of 15.1 times.
This stellar run has put big investment banks at odds. UBS Group said that the turbulence over the past six months had already baked in most regulatory headwinds
, while China International Capital Corp said that it would still take a while to reverse the bearish trend with regards to the sector.
Moreover, inclusion in the cross-border investment channels was no guarantee of a sustained rally. JD Logistic
, the delivery unit of e-commerce platform JD.com, has, for instance, slumped by 11 per cent since it was added to the Stock Connect on July 16, while shares of Yuexiu Property have also slid by that much since it became accessible to mainland traders on June 24.
Kuaishou is Hong Kong’s biggest initial public offering this year at US$6.2 billion. The stock on offer was oversubscribed more than 1,000 times. It, however, nosedived soon after the listing
, when China introduced a flurry of measures to rein in the internet-based industry.
While the Beijing-based company is not directly affected by any regulatory tightening, its business outlook has been clouded after China’s propaganda regulator rolled out a slew of measures to curb media content, such as a ban on the online ranking of celebrities.
This article appeared in the South China Morning Post print edition as: Mainland investors come to rescue of Kuaishou