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.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
Nano-X Imaging Ltd, a start-up founded by Israeli investor Ran Poliakine, is joining forces with South Korean chipmaker SK Hynix Inc to build a machine that could disrupt a century-old X-ray industry. Valued at about US$2 billion after listing on the NASDAQ last month, Nano-X is seeking to transform a multibillion-dollar industry that has essentially relied on the same technology since Nobel Prize in Physics winner Wilhelm Roentgen discovered X-rays in the late 19th century. Nano-X’s device uses semiconductors instead of metal filaments to generate X-rays. The backing of SK Hynix, the world’s second-largest maker of memory chips, is a boost for
Continental AG, which makes control units for Daimler AG cars, cannot pursue antitrust claims against a group of patent owners, including Qualcomm Inc, which are seeking royalties on telecommunications technology, a federal judge in Texas ruled. Avanci LLC, a licensing pool formed by Qualcomm, Nokia Oyj, Sharp Corp and other owners of patents on technology standards, is not breaching antitrust laws when it negotiates license agreements with automakers rather than the component makers, Barbara Lynn, chief district judge for the Northern District of Texas, said in dismissing the suit in a decision posted on Friday. The licensing group charges US$15 per vehicle
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into