Hong Kong stocks were headed for a winning week as Kuaishou surged as much as 200 per cent after attracting a record level of subscription from retail investors in the city’s market history.
The Hang Seng Index advanced 0.6 per cent to 29,295.81 on Friday, topping the advance this week to 3.6 per cent. The Shanghai Composite Index dropped 0.2 per cent to 3,496.33 for a 0.4 per cent gain in week.
Casino operators led the gainers in Hong Kong. Galaxy Entertainment jumped 6.6 per cent to HK$66.90 and Sands China added 3.5 per cent to HK$32.85.
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Kuaishou Technology, the Chinese short-video app operator, jumped by as much as 200 per cent to HK$345, compared with its IPO price of HK$115, and traded at HK$300 at the close under the 1024 stock ticker. That gives the unprofitable firm at market value of about HK$1.23 trillion (US$160 billion).
Tencent Holdings was unchanged at HK$735.50 after climbed by as much as 2.8 per cent. Its 17.7 per cent stake in Kuaishou’s post-IPO capital base before over-allotment is worth US$28.4 billion.
Kuaishou raised about HK$41.3 billion of net proceeds, the most by an internet-based company since car-hailing firm Uber Technologies in May 2019. The stock performed in line with the prices quoted by local brokerages in pre-trading on Thursday.
“Because of the IPO of Kuaishou, people are excited and they don’t want to miss the boat,” said Ronnie Ho, chief executive officer at hedge fund Pinerion Asset Management. Traders are taking profit before the Lunar New Year, while some were reinvesting the earnings from new IPOs such as Kuaishou into other stocks, he added.
Other technology stocks, meanwhile, declined. The Hang Seng Tech Index lost 1 per cent. Semiconductor producers plunged with SMIC sliding 10.8 per cent and Hua Hong Semiconductor losing 7.1 per cent.
China’s biggest chip maker SMIC reported an 18 per cent drop in gross margin in the December quarter, according to a company filing on Friday. Revenue grew 16.9 per cent to US$981 million in the fourth quarter from the same period last year. Gross income fell 11.3 per cent from a year earlier.
Chinese stocks weakened amid noises around China’s relations with the US and UK. A top US official said it has “no reason to believe that entities on those [sanction] lists should not be there.” SMIC was included in the list. The UK revoked the broadcasting license of CGTN, the English language network of China’s state television over its ownership.
Major equity markets in Asia-Pacific were also headed for a positive end to the week. Benchmarks in Japan, South Korea and Australia each recorded more than 1 per cent jump on Friday, tracking gains in US equities overnight amid better job-market and corporate earnings reports.
On the mainland, petrochemical stocks led losses. Oriental Energy and Jiangsu Eastern Shenghong plunged by the daily cap of 10 per cent.
New listings in Shanghai also performed well. Bank of Chongqing as well as China National Gold Group Gold Jewellery each surged by 44 per cent to 15.60 yuan and 7.19 yuan respectively.
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