China, Hong Kong stocks gain, with President Xi Jinping setting off a frenzy of buying of blockchain-related stocks

Hong Kong and mainland China stocks gained Monday, with blockchain-related shares shooting up after President Xi Jinping called for greater focus on developing the technology expected to create sweeping changes in everything from health care to finance and education.

The Shanghai Composite Index gained 0.9 per cent to 2,980, with 14 stocks hitting or nearly hitting the 10 per cent upside limit. The CSI 300 of large stocks traded in Shanghai and Shenzhen rose 0.8 per cent to 3,926.58.

The Hang Seng Index rose 0.8 per cent to 26,891.26, with 42 of the 50 constituent stocks rising.

Great Wall soared 13.9 per cent to HK$6.23 after posting stronger-than-expected results. It hit the daily 10 per cent upside limit on the mainland to close at 8.69 yuan.

The mainland’s biggest sports utility vehicle (SUV) maker said its net profits in the three months ended September 30 surged 506.8 per cent to 1.4 billion yuan. It also represented an 88.2 per cent profit increase from the second quarter of this year.

Meanwhile, Meituan Dianping and smartphone-maker Xiaomi, which both became available on the Stock Connect to southbound traders for the first time Monday, posted gains.

Meituan, a food delivery-to-ticketing company, jumped 3.5 per cent to HK$93.70. Xiaomi rose 1.4 per cent to HK$9.19.

Alan Li, portfolio manager at Atta Capital, predicted Meituan could rise to HK$100 in the next few days. The stock is up more than 100 per cent this year.

Meanwhile, Tencent gained 1.7 per cent to HK$322, after spooking investors last week when it fell below HK$320, which has been a key support level this year. The gains meant it snapped a three-day losing streak.

Investors punished HSBC, which reported a worse-than-expected profit loss of 24 per cent in the third quarter. The stock fell 2.3 per cent to HK$60.25.

HSBC reported a profit of US$2.97 billion in the three months ended September 30, compared with US$3.89 billion in the third quarter of 2018.

“Parts of our business, especially Asia, held up well in a challenging environment in the third quarter. However, in some parts, performance was not acceptable, principally business activities within continental Europe, the non-ring-fenced bank in the UK, and the US,” Noel Quinn, interim chief executive, said in statement.

Blockchain-related stocks posted broad gains after Xi said it would play “an important role in the next round of technological innovation and industrial transformation”, according to a report by Xinhua.

An index compiled by East Money Information that tracks 172 A-share firms developing or using blockchain technology jumped 8.1 per cent, with 107 of the 172 listed companies hitting the daily 10 per cent upside limit.

Big gainers in Hong Kong included Pantronics Holdings, which shot up 20.8 per cent to HK$4.70, and Grandshores Technology, which soared 18.6 per cent to 51 HK cents.

Ascentage Pharma Group International took investors on a wild ride on its first day of trading in Hong Kong. It shot up more than 50 per cent from its initial offering price. But soon after the opening, it began falling. It ended the day at HK$37.60, or 29 per cent below its opening price.

“For small IPOs that involve a limited number of liquid shares, it is quite easy for speculators to bid up the price,” said Louis Tse Ming-kwong, managing director of VC Asset Management.

“Investors should exercise caution as the initial overvaluation often turns out to be unsustainable, especially with unprofitable biotech firms that take investors’ funds to engage in risky drugs development.”