Alibaba’s 10 per cent surge fans rally in Hong Kong stocks on bets new gaming approvals signal end of China crackdown

China on Tuesday approved more online gaming titles in sign the licensing freeze in the US$49 billion domestic market is thawing further

Tencent and NetEase also logged gains despite their games being excluded in the latest round of approvals

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An electronic board showing the Hang Seng Index outside a bank in Mong Kok, Hong Kong. Photo: Edmond So

Published: 10:28am, 8 Jun 2022Updated: 4:49pm, 8 Jun 2022

Chinese tech stocks surged in Hong Kong, led by video-game publishers, after the government approved more titles this month in a move that suggests a licensing freeze is thawing further. Alibaba Group Holding and Bilibili soared by more than 10 per cent.

The Hang Seng Index rose 2.2 per cent to 22,014.59 at the close of Wednesday trading to reclaim a two-month high. The Tech Index jumped 4.8 per cent to the highest level since March 4, tracking an overnight gain in US-listed Chinese stocks. The Shanghai Composite Index gained 0.7 per cent.

Tencent jumped 6.5 per cent to HK$391.40 while NetEase added 5.7 per cent to HK$169.90. Alibaba surged by 10 per cent to HK$108.10 while Kuaishou Technology added 2.9 per cent to HK$87.45 and Bilibili rallied 19.6 per cent to HK$236.60.

The National Press and Publication Administration, the licensing authority, approved 60 titles for release in June after granting 45 titles in April and none in May. Tencent and NetEase, the biggest players in China’s US$49 billion gaming industry, advanced despite their games being excluded this round.

The approval, while stricter than in the past, “essentially reflects the support for the industry,” said Zhang Shule, an analyst at Kandong, a research institute based in Beijing. “This will not change the situation that Tencent and NetEase dominate the field.”

Money managers and analysts at Amundi SA, Schroders and JPMorgan Chase have turned more upbeat on Chinese equities in recent weeks, helping the market to recoup most of the losses from two months of lockdown in Shanghai.