May 30, 2024

Hong Kong stocks soar after China’s market regulator pledges support for city’s IPOs, connect scheme

Hong Kong stocks leapt at the open after China’s market regulator unveiled a series of market reforms late on Friday aimed at enhancing the city’s status as a financial hub.

The Hang Seng Index rose 1.54 per cent to 16,473.69 at 10am. The Tech Index rose 1.82 per cent, while the Shanghai Composite Index was flat.

Among the most heavily traded were gaming giant Tencent, which rose 3 per cent to HK$312.80 and insurer AIA, which added 2 per cent to HK$48.15.

The China Securities Regulatory Commission announced on Friday it will facilitate Hong Kong listings by leading Chinese companies and said it will expand the Stock Connect cross-border investment scheme to enhance the city’s status as an international financial centre.

“The central government fully supports Hong Kong’s long-term maintenance of its unique status and advantages,” the CSRC said in an announcement after markets shut on Friday, reiterating President Xi Jinping’s message that “it is necessary to consolidate and enhance Hong Kong’s status as an international financial centre”.

A Chinese national flag flutters outside the China Securities Regulatory Commission (CSRC) building on the Financial Street in Beijing, China July 9, 2021. Photo: Reuters
The People’s Bank of China (PBOC) kept the 1-year and 5-year loan prime rates (LPR) unchanged at 3.45 per cent and 3.95 per cent on Monday. Analysts had expected this decision after the stronger-than-expected first-quarter economic data and given the priority on currency stabilisation.

Asian markets were broadly higher. Japan’s Nikkei 225 Index rose 0.55 per cent, Korea’s Kospi advanced 0.95 per cent while Australia’s S&P/ASX 200 climbed 1 per cent.

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