Hong Kong stocks hit fresh 10-year high as insurers and Tencent lead gains

The Hang Seng Index rose 0.8pc to 29,136.57, led by gains in financial and tech shares

PUBLISHED : Thursday, 09 November, 2017, 9:28am
UPDATED : Thursday, 09 November, 2017, 10:34pm

Hong Kong stocks hit a fresh 10-year high on Thursday, bolstered by financial and tech shares, as insurers enjoyed faster growth in premium incomes and producer prices increased more quickly than expected.

The Hang Seng Index climbed 0.8 per cent, or 228.97 points, to 29,136.57, its highest close since December 2007. The Hang Seng China Enterprises Index, or the H-share gauge, advanced 1.5 per cent to 11,744.54, a fresh two-year high. Turnover stood at HK$115.5 billion.

Mainland Chinese markets closed higher, lifted by coal and steel producers.

“Market sentiment was buoyed by the recent listings of new economy shares such as China Literature,” said Gordon Tsui Luen-on, managing director of Hantec Pacific. “A new game by Tencent and the spin-off of its unit pushed up its share price and raised the market’s expectations on other tech shares.”

Tencent Holdings, the world’s largest gaming company, rose 0.6 per cent after it launched a new game on Wednesday, which has already attracted millions of players.

China’s Tencent buys minority stake in developer of Snapchat

Tencent also bought 145.8 million non-voting shares in Snap, the operator of Snapchat, equivalent to a roughly 12 per cent stake, in open market purchases during the past month, according to a US regulatory filing on Wednesday.

China Literature, the e-book unit spun off from Tencent Holdings, gained 1.6 per cent, extending an 86 per cent surge on its debut Wednesday.

Official statistics released Thursday showed China’s factory prices rose 6.9 per cent in October, beating the median estimate of 6.6 per cent in a Bloomberg survey. Consumer inflation also accelerated at a faster-than-expected 1.9 per cent in October.

Meanwhile, the China Insurance Regulatory Commission said on Thursday that total premium income for the industry increased 21 per cent from a year ago in the first nine months. That compared with 20 per cent growth in the January-to-August period.

Financial companies were the best performers, with a gauge tracking the sector rising 1.1 per cent. Ping An Insurance advanced 3.7 per cent, China Life rose 2.2 per cent, and China Construction Bank added 1.2 per cent.

China Shenhua, the nation’s biggest coal producer, shot up 5.6 per cent, and CNOOC, China’s largest offshore oil producer, rose 1.5 per cent, on the back of monthly factory prices data.

“The Hong Kong market is still a place where valuations are low and that will continue attracting investors from the mainland and overseas for asset allocations,” said Wu Kan, a fund manager at Shanshan Finance in Shanghai. “The trend is there and we’ll see new highs for the market.”

The Hang Seng Index is the best-performing major stock benchmark in Asia this year, with a 33 per cent advance, as earnings return to growth and mainland capital flows in through the exchange links. Still, the stocks are about a fifth cheaper than their mainland counterparts, according to a gauge tracking the price gap between the two markets compiled by Hang Seng Bank.

In the mainland, the Shanghai Composite added 0.4 per cent, or 12.33 points, to 3,427.79. The CSI 300 Index of large companies gained 0.7 per cent to 4,075.9, while the ChiNext gauge of smaller firms was up 1 per cent at 1,884.11.

Elsewhere in Asia, Tokyo’s Nikkei 225 fell 0.2 per cent to 22,868.71. South Korea’s Kospi edged down 0.1 per cent to 2,550.57, and Sydney All Ordinaries rose 0.6 per cent to 6,122.4.