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Hong Kong stocks rebound from 4-week low on Tencent, NetEase rally as China ends gaming freeze
- Tencent, NetEase gained after China approved new titles for online games developers for the first time since July
- Stocks gained were constrained by Shanghai’s decision to back away from easing lockdown in low-risk areas
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Stocks in Hong Kong rebounded from a four-week low after China resumed approvals for new video-games for the first time since July, fanning gains in Tencent Holdings. Concerns about economic setbacks caused by Covid-19 lockdowns limited gains.
The Hang Seng Index climbed 0.5 per cent to 21,319.13 at the close of Tuesday trading, reversing a drop of as much as 1 per cent. The Hang Seng Tech Index advanced 1.4 per cent, while the Shanghai Composite Index jumped 1.5 per cent.
Tencent rose 3.6 per cent to HK$366.40, snapping a 9.3 per cent drop over the past four days. NetEase added 4.2 per cent to HK$148.40. On the mainland, G-bits Network Technology added 2.6 per cent to 358.09 yuan and Shenzhen ZQ Game jumped 4.8 per cent to 24.06 yuan.
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The government approved some 45 new video games, the National Press and Publication Administration said on Monday. While Tencent and NetEase were not the recipients, the decision marked an official end to a nine-month freeze prompted by a trillion-dollar crackdown on gaming addictions among schoolchildren.
“The current valuations have priced in pretty pessimistic expectations,” said HSBC Jintrust Fund Management in a note. “Opportunities override risks going forward and it’s a good opportunity to build up positions.”
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