18 September 2018

HSI surges 2.7% as reform details cheer investors

Hong Kong stocks surged on Monday as additional documents showing the extent of the reforms agreed upon during the just-concluded Communist Party plenum buoyed investor sentiment.

The benchmark Hang Seng Index closed 623 points or 2.7 percent higher. The Hang Seng China Enterprises Index, the main gauge for H shares, jumped 5.6 percent to finish at 11,307, while the Shanghai Composite Index was up 2.8 percent at 2,197 points.

All blue chips rode the wave, especially financial stocks. China Life Insurance (02628.HK) and Ping An Insurance Group (02318.HK) rose 8.7 percent and 9.5 percent respectively, and were the best performers of the day.

Mainland lenders also staged handsome rallies with China Merchants Bank (03968.HK) closing 9.4 percent higher near its intraday high. Chongqing Rural Commercial Bank (03618.HK) and China Minsheng Banking Corp. (01988.HK) both shot up 7.4 percent, while the big four lenders – Industrial and Commercial Bank of China (01398.HK, 601398.CN), Bank of China (03988.HK, 601988.CN), China Construction Bank (00939.HK, 601939.CN) and Agricultural Bank of China (01288.HK, 601288.CN) – all rose more than 3 percent.

Brokerages continued their rebound amid expectations that authorities will roll out an over-the-counter equity market soon. All shares in the sector made notable increases, with CITIC Securities (06030.HK) as the best performer after soaring more than 13 percent.

Stocks related to baby care, including makers of disposable baby diapers, rallied after Beijing announced after the market’s close last Friday that it will relax the decades-old one-child policy. Hengan International Group (01044.HK) jumped 6.5 percent to a new high, Goodbaby International Holdings (01086.HK) finished 4.2 percent higher while Lerado Group Holdings (01225.HK) was up 2 percent.

Milk producers also took off.  Yashili International (01230.HK), in which China Mengniu Dairy (02319.HK) holds the largest stake, surged nearly 10 percent to hit a new record; Mengniu closed 4.8 percent higher.

Leading instant noodle maker Tingyi (00322.HK), also known as Master Kong, closed 4.8 percent higher after reporting an 18 percent year-on-year growth in its latest quarterly results. SA SA (00178.HK) rose 4.7 percent after saying its net profit for the six months to September grew 27 percent from a year earlier, beating analyst forecasts.

– Contact the writer at [email protected]



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