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Hang Seng Index
MoneyStock Talk

Hong Kong, China stocks climb on report US companies can still do business in China on WeChat, ChiNext reforms kick in

  • Big shareholders are swapping out of Alibaba’s US shares for ones in Hong Kong; US companies can use Tencent’s WeChat in China: Bloomberg
  • On ChiNext, one debuting stock skyrockets by as much as 2,931.5 per cent

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Tencent shares jumped after it was reported that US companies will be allowed to still use WeChat in China. Photo: Bloomberg
Deb Price

Hong Kong stocks kicked off the week with a strong start, as the city was expected to see its fewest new cases of Covid-19 in more than a month and US companies reportedly were told they will be allowed to continue to use WeChat in China.

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Meanwhile, on the mainland, a slew of new companies debuted on the Nasdaq-like ChiNext under looser rules. One debuting stock skyrocketed nearly 3,000 per cent.

The Hang Seng Index rose 1.7 per cent to finish at 25,551.58 on Monday, led by Tencent, real estate and consumer staples. Only nine stocks on the 50-member benchmark posted losses, as sentiment was boosted by news of only 9 new Covid-19 infections in the city. That was the fewest since July 3, and could lead the government to loosen restrictions on restaurants and some other businesses.

Steps by the city’s chief executive on Friday for universal Covid-19 testing among other things “made people believe Chinese travellers will be back soon,” said Alan Li, portfolio manager at Atta Capital. The loss of all-important Chinese visitors has devastated mall operators and retailers like Sa Sa International, which jumped 4 per cent.

Alibaba and Tencent soared. And the city’s new tech board of the top 30 tech companies rose 2.3 per cent, buoyed by excitement that the first exchange traded fund tracking it will be launched Friday, said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.

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Alibaba shot up 4.6 per cent to HK$264.40, as fund managers began moving out of its US shares and into Hong Kong ones amid increased US-China tensions, according to Bloomberg. Its close was a record high since it launched a secondary listing in Hong Kong last November 26 at an offering price of HK$176. The previous record close, HK$261.60, was July 9.

Meanwhile, Tencent jumped 5.8 per cent as US President Donald Trump’s administration privately assured Apple and other US companies they will still be able to do business using the ubiquitous WeChat app inside China, according to Bloomberg . Trump recently declared a ban on WeChat, rocking Tencent shares, but the specifics were not clear. Today’s Tencent gain was its biggest in a month.

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