Chinese tech stocks surged in Hong Kong, led by video-game publishers, after the government approved more titles this month in a move that suggests a licensing freeze is thawing further. Alibaba Group Holding and Bilibili soared by more than 10 per cent.
The Hang Seng Index rose 2.2 per cent to 22,014.59 at the close of Wednesday trading to reclaim a two-month high. The Tech Index jumped 4.8 per cent to the highest level since March 4, tracking an overnight gain in US-listed Chinese stocks. The Shanghai Composite Index gained 0.7 per cent.
Tencent jumped 6.5 per cent to HK$391.40 while NetEase added 5.7 per cent to HK$169.90. Alibaba surged by 10 per cent to HK$108.10 while Kuaishou Technology added 2.9 per cent to HK$87.45 and Bilibili rallied 19.6 per cent to HK$236.60.
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The National Press and Publication Administration, the licensing authority, approved 60 titles for release in June after granting 45 titles in April and none in May. Tencent and NetEase, the biggest players in China’s US$49 billion gaming industry, advanced despite their games being excluded this round.
The approval, while stricter than in the past, “essentially reflects the support for the industry,” said Zhang Shule, an analyst at Kandong, a research institute based in Beijing. “This will not change the situation that Tencent and NetEase dominate the field.”
Money managers and analysts at Amundi SA, Schroders and JPMorgan Chase have turned more upbeat on Chinese equities in recent weeks, helping the market to recoup most of the losses from two months of lockdown in Shanghai.
China’s tech-sector crackdown, from anti-monopoly practices to limiting online video-gaming time for children and slamming for-profit education firms, erased more than US$1 trillion of market value over the past two years. The regulatory overkill has prompted some analysts to call the sector “uninvestable.”
Sentiment improved this week amid media speculation a cybersecurity probe of ride-hailing giant Didi Global was ending, buoying tech stocks in Hong Kong and the US. The Nasdaq Golden Dragon China Index jumped 3.4 per cent following a 5.4 per cent surge on Monday, adding US$70.5 billion of market value along the rise.
Elsewhere, Shanghai continues to chart recovery as major shipping lines return to the dozens of harbours at the world’s biggest port. The city reported 15 new Covid-19 infections on Wednesday, taking the total to 113 since the city lifted the citywide lockdown on June 1. New cases in Hong Kong fell to 489 on Tuesday from 543 on Monday.
Asian markets were stronger with benchmarks in Japan and Australia advancing by 0.4 to 1 per cent. South Korean stocks were little changed.
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