Stocks rise in Hong Kong, China as Shanghai tech board’s kick-off signals further liberalisation in the Chinese capital market






Equities rose in Hong Kong and China on Monday, as investors await a bidding process that opens the doors for technology start-ups to raise capital in Shanghai, heralding another landmark in the liberalisation of the Chinese equities market.

The Shanghai Composite Index gained 1.3 per cent, or 38.20 points, to 3,059.95 at the break, while the benchmark in the Shenzhen exchange also added 1.3 per cent to 1,663.18.

In Hong Kong, the Hang Seng Index rose 0.7 per cent, or 211.99 points, to 29,224.25 at noon while the China Enterprises Index " which tracks the performance of Chinese companies, or H shares, on the exchange " also rallied 0.7 per cent.

Shanghai's stock exchange, ordered by Chinese President Xi Jinping in November to open a new board to help tech start-ups raise funds, will open for submissions for initial public offerings today, according to Caixin. Sentiment was also buoyed as traders ramped up buying of companies that would report solid first-quarter earnings, sending shares of liquor distiller Kweichow Moutai to a record. A total of 258 companies on the mainland's exchanges are due to release 2018 earnings report this week, according to data compiled by Bloomberg.

"We are in the middle of the earnings season so the market is now returning to corporate fundamentals," said Wang Zheng, chief investment officer at Jingxi Investment Management in Shanghai. "Chinese traditional liquor producers are the ones that are seen by investors as the safest bets in terms of earnings."

A gauge of consumer staples stocks, mostly made up of liquor makers, on the CSI 300 Index surged 4.5 per cent for the biggest gain among the 10 industry groups. Kweichow Moutai rose 2.9 per cent to a record 799.90 yuan, taking its market capitalisation past 1 trillion yuan (US$149 billion). Anhui Golden Seed Winery jumped by the 10 per cent daily limit to 6.48 yuan. Luzhou Laojiao surged 8.3 per cent to 57.69 yuan and Wuliangye Yibin rallied 7.3 per cent to 84.50 yuan.

Shenwan Hongyuan Group, a Shanghai-based brokerage, said profits for most liquor producers probably rose between 10 per cent and 20 per cent in the first quarter, with the industry's benchmark product Moutai liquor in strained supply.
Companies linked to electronic cigarettes tumbled after China's central television said in its annual consumer-day gala show on Friday night that the product was detrimental to health.

Shanghai Shunho New Materials Technology, which sells electronic cigarettes through a controlled unit, tumbled 8.6 per cent to 11.45 yuan. Shantou Dongfeng Printing, a maker of cigarette packaging materials, sank 5.2 per cent to 10.06 yuan.

In Hong Kong, shares of Aoyuan Healthy Life Group, a landscaping and property management company, jumped as much as 22 per cent in their trading debut to HK$4.45, from its initial public offering price of HK$3.66.

Prada SpA, the Italian maker of luxury goods, sank 8.8 per cent to HK$22.80 after saying operating profit deceased 10 per cent from a year earlier in 2018


MTR, the subway operator in the city, fell 0.7 per cent to HK$47.20 after two trains collided during a test run of a new signalling system at 3am, injuring two drivers.

Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.


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