Hong Kong stocks yesterday climbed to the highest level since December 2007 as volatility surged and an unexpected drop in Chinese exports spurred speculation that authorities would increase stimulus to support economic growth.
Hong Kong Exchanges & Clearing Ltd jumped 19 percent as Goldman Sachs Group Inc raised its target price. China Merchants Bank Co (招商銀行) climbed by a record in Hong Kong after announcing plans to sell shares.
Almost all foreign-currency B shares traded in Chinese exchanges gained by the 10 percent daily limit.
Data yesterday showed overseas shipments fell 14.6 percent last month in yuan value, while imports also slumped.
The Hang Seng Index rose 2.7 percent to 28,016.34 at the close. The benchmark gauge has climbed 14 percent in an eight-day rally after Chinese authorities made it easier for domestic funds to use the cross-border bourse link.
The Hang Seng China Enterprises Index of Chinese stocks traded in the territory advanced 4.3 percent, while the Shanghai Composite Index climbed 2.2 percent.
“The investor in Shanghai is realizing that there is a better risk-return opportunity on offer in Hong Kong,” Jonathan Garner, Hong Kong-based chief strategist for Asia and emerging markets at Morgan Stanley, said in a telephone interview.
“We now see a greater likelihood of the Hang Seng’s valuation converging with its own long run average. The catalyst is the inflow from the Shanghai investor via the connect program,” Garner said.
The HSI Volatility Index jumped 12 percent to its highest level since June 2012, while the Hang Seng measure’s relative strength index rose to 89.4, the highest since February 1989.
The Shanghai Composite’s RSI was above 70 yesterday for the 19th straight day. Levels above 70 signal to some traders that gains have gone too far, too fast.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by