South China Morning Post
Advertisement
Advertisement
Stocks
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
A man talks on his mobile phone with big screen showing stock prices behind at a stock brokerage house in Shenyang. Photo:: China Photo Press
BusinessMarkets

Alibaba, Meituan surge 16 per cent to fuel stock rally in Hong Kong as China mulls halting tech crackdown amid economic crisis

  • The Hang Seng Index surges 4 per cent, paring the monthly loss to 4.1 per cent, amid signs policymakers are worried about lockdowns, manufacturing slump
  • The Shanghai Composite Index, Asia’s worst performer, rebounds after facing the biggest sell-off since 2016
Stocks
Zhang Shidong
Zhang Shidongin Shanghai
Why you can trust SCMP
Alibaba and Meituan fuelled Hong Kong’s best stock rally in a month as China prepares to end a crackdown on tech companies, potentially ending a multi-month, trillion-dollar slump. The Communist Party also vowed to use new tools to support the pandemic-hit economy.

The Hang Seng Index surged 4 per cent to 21,089.39 at the close, narrowing the loss in April to 4.1 per cent. The Tech Index soared 10 per cent, with Alibaba and Meituan surging by 16 per cent in the hottest rallies since a rebound from a mid-March sell-off.

The Shanghai Composite Index added 2.4 per cent, as the party’s 25-member Politburo vowed on Friday to speed up tax cuts and supportive policies, as well as the use of new monetary policy tools and effective investment. The gauge fell 6.3 per cent for the month, the most since a sell-off in January.

“It’s a strong signal that Beijing needs the big tech companies to revive economic growth,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “How much of those [market-cap] losses will be recovered will depend on them returning to high-growth earnings phase.”

China is expected to have a symposium with the country’s Big Tech on the heels of the Politburo meeting on Friday, raising hopes Beijing will halt its sweeping regulatory clampdown and give internet platforms bigger roles to prop up the ailing economy, two sources briefed on the situation told the Post.
China to end regulatory storm over Big Tech and give sector bigger role in boosting slowing economy

A joint regulatory meeting is also set to take place as soon as this weekend to put all regulators on the same page, one of them said.

Since China canned Ant Group’s jumbo stock offering in Shanghai and Hong Kong in November 2019, Chinese tech stocks traded in Hong Kong and the US have nosedived, erasing more than US$1 trillion of market value. The sporadic crackdown has forced some Wall Street brokers like JPMorgan and Goldman Sachs to pose if China has become uninvestable

01:26

China kicks off antitrust probes into Alibaba over alleged monopolistic practices

China kicks off antitrust probes into Alibaba over alleged monopolistic practices

Stocks were earlier lifted as new Covid-19 cases in Shanghai’s low-risk unguarded zones fell to the lowest since a phased lockdown was imposed one month ago. That suggests the outbreak may come under control in the coming days, easing supply-chain disruptions.

China tech rout: Hong Kong market sinks after JPMorgan calls sector ‘uninvestable’ as global funds shun macro, geopolitical risks

Chinese technology stocks were the top three gainers on the Hang Seng Index. Alibaba surged 16 per cent to HK$102.10, Meituan also climbed by that much to HK$172 and JD.com jumped by the same magnitude to HK$265.60. Tencent advanced 11 per cent to HK$377.40.

02:31

Beijing orders mass testing as Chinese capital braces for Omicron surge

Beijing orders mass testing as Chinese capital braces for Omicron surge

CNOOC rallied 3.5 per cent to HK$11.22 after proposing to pay shareholders almost HK$56 billion (US$7.1 billion) in special dividends. Its Shanghai-traded stock soared by the 10 per cent daily limit to a record 17.01 yuan.

Both Hong Kong and mainland stocks had a brutal month, as the central bank underwhelmed investors this month with its slow approach amid concerns about inflation and capital outflows. Some economists had called for more stimulus to check a slump in output and confidence.

An index tracking manufacturing in mainland China probably fell to 47.3 this month, the lowest since the peak of Covid-19 outbreak in Wuhan in February 2020, according to economists’ consensus tracked by Bloomberg. The statistics bureau will report the Purchasing Managers’ Index on Saturday. A reading below 50 indicates contraction.

Trading in Hong Kong shrank, with volume 16 per cent below the 30-day average on Friday. The city’s market will be shut on Monday for Labour Day, while the mainland bourses will close next week through Wednesday.

Dowell Service Group, a China-based property management company, was unchanged at HK$11.90 on the first day of trading in Hong Kong.

Post