Hong Kong stocks rose, completing the Hang Seng Index's biggest two-day gain in more than six years, after the Chinese government said it would let some individual investors buy the city's securities.
Hong Kong Exchanges & Clearing Ltd, which manages the local stock market, surged on expectations trading volumes would increase. China Life Insurance Co gained on speculation Chinese investors would favor the firm's Hong Kong-listed "H shares" over its more expensive mainland stock.
The Hang Seng rose 133.72, or 0.6 percent, to close at 21,729.35, having pared its gains in the afternoon on concern the benefits of China's new policy were being overestimated. It surged 6.6 percent in the past two days, the most since April 2001. The Hang Seng China Enterprises Index, which tracks 41 H shares, gained 2.9 percent to 12,308.75.
"Only time will tell how this policy will impact on asset prices," said Tim Leung, who helps manage US$1 billion at IG Investment Ltd in Hong Kong. "Everything has a starting point and I doubt very much that this will be the end of it. We have been overweight [on] H shares and this is one of the reasons why."
Hong Kong's stock market is benefiting from increased linkage to China's economy 10 years after the UK handed the territory back to the mainland. Shares of Chinese companies accounted for about 59 percent of the value of shares traded on Hong Kong's exchange this year through last month, up from 1997's 38 percent, the bourse's Web site shows.
The latest policy announcement will probably increase that total as it paves the way for China's 17 trillion yuan (US$2.2 trillion) in household savings to enter Hong Kong's stock market.
China's State Administration of Foreign Exchange said on Monday that Chinese nationals with a Bank of China Ltd account in Tianjin's Binhai economic zone could invest foreign currency in Hong Kong stocks in a pilot program. The regulator did not specify an investment maximum or say when the trial would start.
Hong Kong Exchanges, the manager of Hong Kong's stock market, surged HK$7.20 (US$0.91), or 6.2 percent, to HK$123.30. It climbed 16 percent the past two days, the most since July 2000.
The company will spend HK$78 million to increase the capacity of its trading systems in anticipation of more Chinese individuals investing in Hong Kong, chief executive Paul Chow (周文耀) told the South China Morning Post.
"This news should produce an upward revaluation of Hong Kong-listed China shares," said Jing Ulrich, chairman of China equities at JPMorgan Chase & Co.
"Many will see this as a green light to take advantage of cheaper valuations on offer for Chinese shares listed in Hong Kong," Jing said.
Twenty-three stocks on the 39-member Hang Seng Index rose, while 14 fell. August futures lost 0.2 percent to 21,600. Turnover was HK$116.8 billion (US$15 billion), 43 percent above the three-month daily average, and the highest since Aug. 1.
Beijing’s continued provocations in the Taiwan Strait reveal its intention to unilaterally change the “status quo” in the area, the US Department of State said on Saturday, calling for a peaceful resolution to cross-strait issues. The Coast Guard Administration (CGA) reported that four China Coast Guard patrol vessels entered restricted and prohibited waters near Kinmen County on Friday and again on Saturday. A State Department spokesperson said that Washington was aware of the incidents, and urged all parties to exercise restraint and refrain from unilaterally changing the “status quo.” “Maintaining peace and stability across the Taiwan Strait is in line with our [the
EXTENDED RANGE: Hsiung Sheng missiles, 100 of which might be deployed by the end of the year, could reach Chinese command posts and airport runways, a source said A NT$16.9 billion (US$534.93 million) project to upgrade the military’s missile defense systems would be completed this year, allowing the deployment of at least 100 long-range Hsiung Sheng missiles and providing more deterrence against China, military sources said on Saturday. Hsiung Sheng missiles are an extended-range version of the Hsiung Feng IIE (HF-2E) surface-to-surface cruise missile, and are believed to have a range of up to 1,200km, which would allow them to hit targets well inside China. They went into mass production in 2022, the sources said. The project is part of a special budget for the Ministry of National Defense aimed at
READY TO WORK: Taiwan is eager to cooperate and is hopeful that like-minded states will continue to advocate for its inclusion in regional organizations, Lai said Maintaining the “status quo” in the Taiwan Strait, and peace and stability in the Indo-Pacific region must be a top priority, president-elect William Lai (賴清德) said yesterday after meeting with a delegation of US academics. Leaders of the G7, US President Joe Biden and other international heads of state have voiced concerns about the situation in the Strait, as stability in the region is necessary for a safe, peaceful and prosperous world, Lai said. The vice president, who is to be inaugurated in May, welcomed the delegation and thanked them for their support for Taiwan and issues concerning the Strait. The international community
COOPERATION: Two crewmembers from a Chinese fishing boat that sank off Kinmen were rescued, two were found dead and another two were still missing at press time The Coast Guard Administration (CGA) was yesterday working with Chinese rescuers to find two missing crewmembers from a Chinese fishing boat that sank southwest of Kinmen County yesterday, killing two crew. The joint operation managed to rescue two of the boat’s six crewmembers, but two were already dead when they were pulled from the water, the agency said in a statement. Rescuers are still searching for two others from the Min Long Yu 61222, a boat registered in China’s Fujian Province that capsized and sank 1.03 nautical miles (1.9km) southwest of Dongding Island (東碇), it added. CGA Director-General Chou Mei-wu (周美伍) told a