Hong Kong stocks halt 6-day decline as Chinese banks rise on regulatory call

Name: SCMP
Telephone: +852-2680-8888

Listed companies with stock prices below book value need to come up with plans to reverse course, the CSRC said on Friday

Reading Time:2 minutes

Why you can trust SCMP

People pass screens displaying stock information outside Exchange Square in Central, Hong Kong, on January 23, 2024. Photo: Reuters

Zhang Shidongin Shanghai

Published: 10:23am, 18 Nov 2024Updated: 4:20pm, 18 Nov 2024

Hong Kong stocks rose, with the benchmark snapping a six-day decline, as Chinese banks rose on optimism that the sector will be do more to boost share prices after the regulator urged companies with share prices lower then book values to improve performance.

The Hang Seng Index advanced 0.8 per cent to 19,576.61 at the close, reversing from a 7.3 per cent decline over the past six trading days. The Hang Seng Tech Index gained 0.3 per cent.

Mainland China’s benchmarks edged lower. The CSI 300 Index fell 0.5 per cent, and the Shanghai Composite Index dropped 0.2 per cent.

Industrial and Commercial Bank of China (ICBC) paced the gain among Chinese commercial lenders, which traded at an average 50 per cent discount to book values. E-commerce platform operator JD.com surged after Morningstar said the stock was undervalued. Peer Alibaba Group Holding slipped after its revenue for the quarter to October missed analysts’ estimates.

Listed companies whose stock prices continually trade below book values are required to come up with plans to reverse course and disclose these plans to the public after deliberation by their boards, the China Securities Regulatory Commission said in a statement after the market closed on Friday. Those companies need to assess the announced plans annually and fine-tune them if necessary, it added.

Sentiment on Hong Kong and Chinese stocks remains shaky after China failed to roll out the fiscal stimulus anticipated by investors while the threat of higher tariffs looms after the re-election of Donald Trump as US president. The Hang Seng Index slumping 6.3 per cent last week, taking to 16 per cent its decline from a high in October.