Hong Kong stocks’ benchmark Hang Seng Index (HSI) rebounded on Wednesday, rising 2.87 percent to close at 18,430, as sentiment was buoyed by potential capital market reforms announced at the Lujiazui Forum in Shanghai.
The Hang Seng Tech Index leaped 3.65 percent, to 3,832, while the Hang Seng China Enterprises Index jumped 3.45 percent, to 6,586.
The CSRC’s announcement of reform measures boosted market sentiment.
Mike Leung Kit-man, Wocom Securities Ltd
Technology equities led the gains, with Chinese-mainland online entertainment services provider Bilibili Inc surging nearly 19 percent, and smartphone maker Xiaomi Corp rising over 6 percent.
At the two-day Lujiazui Forum, which kicked off in Shanghai on Wednesday, Wu Qing, president of the China Securities Regulatory Commission (CSRC), the country’s top securities regulator, said the commission will introduce eight measures to the Science and Technology Innovation Board, including improving the mechanisms for issuance and underwriting, mergers and acquisitions, equity incentives, and trading.
“The CSRC’s announcement of reform measures boosted market sentiment,” said Mike Leung Kit-man, responsible officer at Wocom Securities Ltd.
However, there hasn’t been a significant increase in Hong Kong stock trading volume. A-shares’ performance today was only average, suggesting that the short-term upward trend in the HSI may not be sustainable.
Jason Lee Wai-kit, director of wealth management at Valuable Capital Ltd, echoed Leung’s views, saying that the rebound was mainly driven by positive expectations from the mainland. “Investors are anticipating more financial policy support that could stimulate the market,” he said.
Lee also said that on Wednesday, Guoxin Investment, a subsidiary of China Reform Holdings, a State-owned enterprise under the State-owned Assets Supervision and Administration Commission of the State Council, subscribed to the first batch of CSI Guoxin Stock Connect SOE Premium Index ETFs. “This move boosted the performance of related large State-owned enterprise stocks, contributing to the Hang Seng Index’s 500-point gain today,” he said.
In a statement, Guoxin Investment said the subscription signals the government’s confidence in the long-term value of Hong Kong-listed SOEs.
However, Leung and Lee agreed that despite the increase in the HSI, the trading volume reached only around HK$ 110 billion, which does not support this upward trend.
At the same forum, CSRC Vice-Chairman Fang Xinghai said that as of Tuesday, 158 companies have filed for overseas listings the launch last year of the filing mechanism for Chinese companies' overseas listing. Eighty-five are listing in Hong Kong and 73 in the United States.
Fang said the central government supports more mainland companies' opting for Hong Kong as their preferred destination for overseas listings.
Contact the writer at tianyuanzhang@chinadailyhk.com
