Hong Kong stocks rose, extending last week’s gain, after Chinese regulators said they would support the financing activities of property developers, adding to optimism about a stabilisation of economic growth.
The Hang Seng Index climbed 1.9 per cent to 17,778.07 at the close on Monday. The Hang Seng Tech Index gained 2.5 per cent, while the Shanghai Composite Index added 0.5 per cent.
Developer Longfor Group Holdings advanced 1.9 per cent to HK$13.02 and China Resources Land, one of its peers, gained 3.3 per cent to HK$29.95 after China’s financial regulators said they would support property developers in receiving loans, issuing bonds and obtaining reasonable equity financing from capital markets.
“Market risk appetite is expected to pick up as ramped-up policy support is set to improve the economic outlook,” said Zhang Xia, an analyst at China Merchants Securities. “Meanwhile, the external headwinds will wane as well, with the Federal Reserve expected to end its rate-hiking cycle.”
Alibaba Group Holding, which owns this newspaper, rebounded 1.6 per cent to HK$74.45 after the office of founder Jack Ma said he remained positive about the company in a clarification of his shares disposal plan. Online game operator NetEase advanced 2.1 per cent to HK$183.20 after Morningstar said the company would launch a slew of blockbuster titles next year, while Tencent Holdings added 3.6 per cent to HK$326.60.
The Hang Seng Index rallied 1.5 per cent last week as better-than-expected China economic data, a softening of US inflation and a meeting between Presidents Xi Jinping and Joe Biden lifted sentiment. The gains were tempered by Alibaba’s decision to scrap the spin-off of its cloud computing business and founder Jack Ma’s share divestment plan.
UBS Group said in a report on Monday that the MSCI China Index, which tracks more than 700 companies listed at home and abroad, would gain 15 per cent next year on the back of 10 per cent earnings growth and the expansion of the price-to-earnings ratio, echoing a call by Goldman Sachs last week.
Elsewhere on Monday, Chinese electric-vehicle maker Li Auto jumped 2.4 per cent to HK$160.90 and pharmaceutical company Wuxi Apptec advanced 3.5 per cent to HK$96.35 after Hang Seng Indexes said that the two stocks would j oin the city’s stock benchmark starting December 4.
Chinese smartphone maker Xiaomi gained 1.5 per cent to HK$16.18 before its earnings release later on Monday. Third-quarter net income probably jumped 120 per cent from a year earlier to 4.65 billion yuan (US$647 million), according to the consensus estimates of analysts tracked by Bloomberg.
Air China advanced 3.8 per cent to HK$5.54 and China Southern Airlines rallied 2.6 per cent to HK$3.96. China’s air carriers flew 56 million passengers in October, up 252 per cent from a year earlier, according to the aviation regulator.
Some 28 companies that are components of the Hang Seng Index have released their third-quarter results, posting an average of 6.2 per cent year-on-year profit growth, according to Bloomberg data. That compares with a 7.7 per cent increase in first-half earnings. Chinese search engine operator Baidu and online travel agency Trip.com will release their results on Tuesday.
Other major Asian markets were mixed on Monday. Japan’s Nikkei 225 slipped 0.6 per cent, while South Korea’s Kospi rose 0.9 per cent and Australia’s S&P/ASX 200 added 0.1 per cent.
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