Caixin
Nov 23, 2017 06:42 AM
FINANCE

Hong Kong Benchmark Touches Decade High

The daily turnover of the Hong Kong market reached HK$157 billion on Wednesday, the 13th consecutive day above HK$100 billion.. Photo: IC
The daily turnover of the Hong Kong market reached HK$157 billion on Wednesday, the 13th consecutive day above HK$100 billion.. Photo: IC

Hong Kong’s benchmark equities index Wednesday climbed above the 30,000-point mark for the first time in 10 years amid growing investor confidence.

The Hang Seng Index opened above 30,000 for the first time since November 2007 and hit a daily high of 30,199.69 in morning trading. The index gained 0.6% to 30,003.49 Wednesday, the highest closing since Nov. 5, 2007.

Gains were mainly driven by aviation, financial and property stocks, while tech shares including Tencent Holdings and China Literature declined against the trend.

Stock of the Hong Kong Exchanges & Clearing Ltd. was the top performer on the day, rising 3.8% to close at HK$254.2 ($32.5).

Tech giant Tencent, the most heavily weighted stock in the Hang Seng Index with 10.6%, dropped 0.7% to close at HK$426.8. Even so, Tencent has surged 22% this month, taking its market value above $500 billion.

So far this year, the Hang Seng Index has climbed more than 36% as global markets boomed. The three major U.S. indexes touched record highs Tuesday while China bourses in Shanghai and Shenzhen both ended higher Wednesday.

The daily turnover of the Hong Kong market reached HK$157 billion, the 13th consecutive day above HK$100 billion.

Liao Qun, chief economist at CITIC Bank, attributed the Hang Seng’s robust performance to steady recovery of the global and China economies, which has boosted investor confidence. Meanwhile, the Hong Kong market has accelerated growth this year partly because its average valuation has been largely lower than other benchmark gauges, Liao said.

As the global economy improves, the Hong Kong market is likely to continue its momentum next year, Liao predicted.

Steady inflows from mainland markets also empowered the Hong Kong market as trading through the two stock connection programs with mainland markets has contributed to about 15% of the total daily transactions in Hong Kong, according to Andrew Swan, BlackRock's head of Asian and global emerging markets equities.

Transactions through the Shanghai-Hong Kong Stock Connect program, launched in April 2014, were valued at 1.4 billion yuan ($212 million) Wednesday, or 13.6% of total trading. Trading through the Shenzhen-Hong Kong Stock Connect program launched late last year totaled 1.7 billion yuan. The most-traded stocks include Tencent, the Industrial and Commercial Bank of China and Ping An Insurance.

As China’s economy regains momentum and businesses turns profitable, shares of domestic companies, including traditional sectors such as energy, materials and financial services, will be increasingly welcomed by investors, Swan said.

Contact reporter Han Wei (weihan@caixin.com)

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