21 August 2019

HSI rebounds after preference share green light in China

Hong Kong’s benchmark Hang Seng Index (HSI) bounced back Friday after a sharp, 380-point fall in the previous session.

The market was cheered by a China Securities Regulatory Commission announcement that three kinds of companies, including constituents of the Shanghai Stock Exchange 50 Index, will be able to issue preference shares. The decision opens a new funding channel for those companies.

The HSI added 254 points, or 1.2 percent, to 21,436. The Hang Seng China Enterprises Index, the main gauge for H shares, gained 2.44 percent to finish at 9,427. And the Shanghai Composite Index rose 2.72 percent to close at 2,047 points.

Hutchison Whampoa (00013.HK) revealed after the market’s close that Singapore sovereign fund Temasek has agreed to invest HK$44 billion (US$5.7 billion) in exchange for a 24.95 percent stake in Watson, Hutchison’s personal and health care chain. Temasek’s investment in Watson values the company at HK$177 billion, which could translate into HK$41.5 per share for Hutchison shareholders. Hutchison closed 1.04 percent higher for the day.

China Mobile (00941.HK) fell over 3.7 percent to be the day’s worst performing blue chip, a day after the group announced disappointing results.

Export trader Li & Fung (00494.HK), on the other hand, closed 21.1 percent up for the day to be the best performer in the HSI. The group plans to spin off its branding and licensing businesses into a new entity called Global Brands Group.

Software player Kingsoft (03888.HK) closed 1.7 percent higher to hit a peak. The counter has risen 4 days on a roll as its result beat estimates.

– Contact the writer at [email protected]



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