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Deb Price

Kathleen Magramo

Hong Kong stocks posted their best performance in a month as traders swooped in and scooped up marquee names like Tencent and WH Group on positive coronavirus news and big US overnight stock gains.
The Hang Seng Index closed ahead Thursday by 2.1 per cent at 26,767.87. That was its biggest percentage gain since February 6, when it rose 2.6 per cent. Of its 50 member constituents, 49 advanced while one dropped.
AAC Technologies was the biggest winner among blue chips, jumping up 5 per cent to HK$53.1. Sino Biopharmaceuticals added 4.8 per cent to HK$12.34, while index heavyweight Tencent gained 3.1 per cent to HK$406.20.
And traders cheered beer stocks as well. China Resources jumped 5.6 per cent, while Budweiser Brewery APAC rose 3.2 per cent.
China benchmarks rallied for the fourth straight session. The Shanghai Composite Index added nearly 2 per cent to 3,071.68.
Odds in investors’ favour after coronavirus upends the world’s gambling capital of Macau, analysts say
The Shenzhen Component Index gained 1.9 per cent and the CSI 300 gauge of large caps listed in Shenzhen and Shanghai rose 2.2 per cent.
“The virus spread seems under control in Hong Kong and China,” said Alan Li, portfolio manager at Atta Capital.
“The biotech sector may rally for the short term due to development of coronavirus vaccines. But I don’t believe [a vaccine] will come to the market within one year due to safety concerns. Also the route for companies to gain profit from these vaccines remains unclear,” Li said.
Banks, construction materials, infrastructure and property are Li’s top picks, due to expectations the US Federal Reserve and other central banks will lower rates further to help blunt the economic damage caused by the coronavirus.
Coronavirus: China’s factory closures could cause global medicine shortages
Elsewhere in Asia, stocks ended the day mostly higher as well.
Sentiment got a boost from the International Monetary Fund saying it will help emerging market countries with a US$50 billion aid package over the spreading coronavirus, while the US Congress moved quickly on a US$8.3 billion antivirus plan.
Meanwhile, US stocks surged overnight as moderate former vice-president Joe Biden outperformed expectations in the “Super Tuesday” Democratic presidential primaries. Markets have worried about proposals to overhaul health care and tax policy by Democratic socialist Bernie Sanders, who is also a leader in the race to take on Republican incumbent Donald Trump in the November general election.
Tokyo’s Nikkei 225 added 1.1 per cent.
Seoul’s Kospi gained 1.3 per cent higher and the technology-heavy Kosdaq was up 1.3 per cent.
Australia’s S&P/ASX200 ended 1.1 per cent higher, while New Zealand’s S&P/NZX50 advanced nearly 2 per cent.
Clock ticking for China to stop foreign firms fleeing country, report says
In Hong Kong, Macau casino stocks gained, with Sands China rising 2.6 per cent and Galaxy Entertainment advancing 3 per cent. They have been hammered during the coronavirus outbreak, which led to a temporary shutdown of casinos for 15 days and the ongoing suspension of the visa programme that enables mainlanders to cross into the world’s biggest gambling town.
“Now is the time for traders to cover their short positions [in Hong Kong stocks] to buy in the dip and the improved sentiment,” said Louis Tse Ming-kwong, managing director at VC Asset Management, “The Hang Seng Index rebound is not that strong but we still expect it to hit 28,000,” he said.
The benchmark is still down 5 per cent for the year.
Hang Seng Index blue chip stocks tend to “go with the flow” and are safe bets amid the short window of boosted sentiment from rate cuts around the world, Tse added.
He said Apple suppliers like AAC are getting more hopeful that production will resumed to normal levels.
More bad news for China’s economy as services drop to all-time low
Meanwhile, insurance company Ping An gained 2.4 per cent to HK$89.05.
A-share investors were also much more confident that China’s central bank will stabilise the economy and market sentiment following the Fed’s emergency cut, Tse added.
In the mainland, pork-linked stocks surged.
The year-on-year intensity of the African swine fever has dropped significantly, China’s Ministry of Agriculture and Rural Affairs said in a state press conference Thursday afternoon.
China’s largest pork and poultry producer, Wens Foodstuff, surged 9.4 per cent to 38 yuan. Muyuan Foodstuff, the country’s second largest pig farmer, was up 4 per cent to 126.6 yuan.
Hong Kong-listed meat processing company WH Group jumped 4.8 per cent to HK$8.5.
Liquor distiller Kweichow Moutai shot up 3.7 per cent to 1,171 yuan.
Meanwhile, Apple AirPod assembler Luxshare Precision Industry slipped 0.7 per cent to 45.48 yuan.


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Business

Money

Markets & Investing

Markets

Traders are confident lower interest rates are coming, including in the US
Coronavirus still in driver’s seat, but investors betting it will be controlled


“The virus spread seems under control in Hong Kong and China,” said Alan Li, portfolio manager at Atta Capital. That boosted sentiment for stock buying.


WH Group

Hong Kong stocks see best performance in a month as traders scramble into Tencent, WH Group, AAC Tech

Traders are confident lower interest rates are coming, including in the US Coronavirus still in driver’s seat, but investors betting it will be controlled

Traders are confident lower interest rates are coming, including in the US

Coronavirus still in driver’s seat, but investors betting it will be controlled