Hong Kong Exchanges & Clearing Ltd had its biggest gain in seven years after the city's government increased its stake in the bourse to 5.88 percent.
The exchange's shares surged HK$32.10 (US$4.13), or 20 percent, to close at HK$190.10 in Hong Kong, the biggest gain since June 28, 2000. The stock reached a high of HK$197 earlier yesterday after the share purchase, which was announced in a statement posted on the government's Web site on Friday.
"The main objective is that, from a long-term perspective, the government as a shareholder may play a positive role in the stock exchange's development," John Tsang Chun-wah (曾俊華), the city's financial secretary, said after a conference in Hong Kong yesterday.
Hong Kong is raising its stake following a decision last year to form closer ties with regional financial organizations, such as stock exchanges in China, Tsang said. The latest increase will improve cooperation between the governments and among exchanges, he added.
The government didn't specify the number of shares it bought or the amount of the additional investment. the Chinese-language Ming Pao daily reported on Saturday that the government spent HK$2.4 billion (US$308 million) buying 15.7 million shares in Hong Kong Exchanges.
Hong Kong has been raising its stake in the exchange since last September, when its shares traded at about HK$50, the newspaper said. A larger government-held stake could pave the way for a merger with the Shanghai Securities Exchange, owned by the central government in China, Ming Pao said, citing unidentified officials.
"The action of purchasing a stake beyond 5 percent is a manifestation of the government supporting Hong Kong Exchanges to maintain its leading position in Asia," said Lei Wang, co-manager of more than US$14 billion at Thornburg International Value Fund in Santa Fe, New Mexico. "It also cements the government's leading role in the company's strategic positioning in the future."
Tsang declined to say if Hong Kong's government will further raise its stake in the city's bourse, citing the market sensitivity of such comments. The government didn't buy the shares to intervene in the market, he added.
INVESTOR RESILIENCE? An analyst said that despite near-term pressures, foreign investors tend to view NT dollar strength as a positive signal for valuation multiples Morgan Stanley has flagged a potential 10 percent revenue decline for Taiwan’s tech hardware sector this year, as a sharp appreciation of the New Taiwan dollar begins to dent the earnings power of major exporters. In what appears to be the first such warning from a major foreign brokerage, the US investment bank said the currency’s strength — fueled by foreign capital inflows and expectations of US interest rate cuts — is compressing profit margins for manufacturers with heavy exposure to US dollar-denominated revenues. The local currency has surged about 10 percent against the greenback over the past quarter and yesterday breached
MARKET FACTORS: Navitas Semiconductor Inc said that Powerchip is to take over from TSMC as its supplier of high-voltage gallium nitride chips Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday in a statement said that it would phase out its compound semiconductor gallium nitride (GaN) business over the next two years, citing market dynamics. The decision would not affect its financial targets announced previously, the world’s biggest contract chipmaker said. “We are working closely with our customers to ensure a smooth transition and remain committed to meeting their needs during this period,” it said. “Our focus continues to be on delivering sustained value to our partners and the market.” TSMC’s latest move came unexpectedly, as the chipmaker had said in its annual report that it has
SECURITY WARNING: The company possesses key 3-nanometer technology, and Taiwan should prevent it from being transferred to China, a lawmaker said The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區). Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million). The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure. The
ELECTRONICS: Strong growth in cloud services and smart consumer electronics offset computing declines, helping the company to maintain sales momentum, Hon Hai said Hon Hai Precision Industry Co (鴻海精密) on Saturday announced that its sales for last month rose 10 percent year-on-year, driven by strong growth in cloud and networking products amid the ongoing artificial intelligence (AI) boom. The company, also known internationally as Foxconn Technology Group (富士康科技集團), reported consolidated sales of NT$540.24 billion (US$18.67 billion) for the month, the highest ever for the period, and a 10.09 percent increase from a year earlier, although it was down 12.26 percent from the previous month. Hon Hai, which is Apple Inc’s primary iPhone assembler and makes servers powered by Nvidia Corp’s AI accelerators, said its cloud
RSS