Hong Kong stocks climbed to near a 21-month high, adding to the market’s best start to the year since 1985. Tencent Holdings, the world’s sixth largest company, surged to record, minting HK$724.4 billion (US$93.5 billion) of new wealth in a single day.
The Hang Seng Index rose 2.4 per cent to 30,159.01 on Monday. The index has appreciated 10.8 per cent this year to the highest level since May 2019. The Shanghai Composite Index gained 0.5 per cent to 3,624.24, the highest since December 2015.
Tencent paced index members, surging 10.9 per cent to HK$766.50. The WeChat operator has now sprinted to a 35.9 per cent gain this month alone, pushing its capitalisation to US$948.7 billion. It surpassed electric-car maker Tesla in value on January 15, and is now within 5.5 per cent of breaking into the five-member exclusive club of US$1 trillion companies, according to Bloomberg data.
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China Renaissance surged by record 21.3 per cent, joining Tencent in rallying as Kuaishou’s Hong Kong initial public offering nears. The brokerage is one of the IPO sponsors.
“The Hang Seng Index still has some room to grow as it still lags a lot behind A shares, so it’s attractive to investors,” said Chi-man Wong, head of research at China Galaxy International Securities in Hong Kong. “The market may have some fluctuations ahead as it has risen very fast.”
Chinese A shares trade at about 35 per cent premium over their peers in Hong Kong, according to a gauge tracking the price gaps between mainland-listed A and Hong Kong-listed H shares.
Meituan added 5.2 per cent to HK$399.80, also hitting a new high. The Hang Seng Tech Index of 31 members jumped 4.5 per cent. Hong Kong Exchanges & Clearing, a beneficiary of surging trading volumes, jumped 8.3 per cent to HK$553.
China Evergrande New Energy Vehicle soared by 51.7 per cent to HK$45.35, after the firm announced a plan to raise HK$26 billion by selling 952.4 million new shares at HK$27.30 each.
Funds from mainland China have been snapping up leading industry players on valuations, as well as supporting those beaten down by US sanctions and index deletions. They ploughed in more than HK$231 billion (US$29.8 billion) in record net purchases through the Stock Connect southbound channels this month, or more than a third of the amount they invested in one quarter last year.
Net inflows of southbound fund amounted to HK$19.3 billion, according to Bloomberg data, up from HK$16.3 billion on Friday.
Oil explorer CNOOC lost 0.1 per cent after rising as much as 3 per cent. Index compilers FTSE Russell and S&P Dow Jones plan to remove the firm and other sanctioned Chinese stocks from several equity benchmarks. CNOOC has benefited from at least HK$13.6 billion net purchases by mainland funds this year through January 19.
China’s economic growth, which returned to a pre-pandemic pace of above 6 per cent last quarter, could spur an imminent rebound in corporate earnings among Hang Seng Index members, analysts said. They are seen rising 26 per cent, compared with a 30 per cent slump in 2020, based on consensus forecasts compiled by Bloomberg.
On the mainland, liquor stocks rallied. Kweichow Moutai, the world’s most valuable liquor firm, surged by 4.6 per cent to 2,175 yuan, lifting its market cap to 2.73 trillion yuan.
Markets in Asia-Pacific region were also on bullish mode despite signs of worsening Covid-19 pandemic. Australia’s S&P/ASX 20 and Japan’s Nikkei 225 both added more than 0.6 per cent while South Korea’s Kospi Index surged 2.2 per cent.
Elsewhere, traders are also closely watching the speeches of top officials at the virtual World Economic Forum today. Chinese President Xi Jinping may call for multilateralism and strenghtening global cooperation, while facilitate economic globalisation to the right direction, state media China News said in a report on Monday.
China will release its industrial profit data on Wednesday, and official Purchasing Managers‘ Index during the weekend.
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