Hong Kong Tech Index Enters Bull Market Driven by More Stimulus Prospect

BEIJING, July 28 (TiPost)— A rally in tech shares finally drove a gauge of the sector into bull market territory.

Credit：Visual China

The Hang Seng Tech Index rallied about 2.9% on Friday, closing at the highest in more than five months. The gauge, which represents the 30 largest technology companies listed in Hong Kong including Tencent Holdings Ltd. and Alibaba Group Holding Ltd, entered a technical bull market with its gains from a May low topping 20% as of close. It outperformed the last session of a frenzy week. The same day saw Hong Kong’s benchmark Hang Seng Index rose 1.4%.

All but one of 30 components of the Hang Seng Tech Index settled higher Friday. Most of internet behemoths gained at least 1%. Meituan and Bilibili shares surged more than 4% and Tencent shares jumped nearly 2%, while NetEase shares slid around 1.2%. Shares of Tesla’s Chinese rivals Xpeng and Li Auto surged over 5%, and those of another electric vehicle (EV) maker Nio up more than 4%.

Hong Kong tech stocks’ rally highlighted improved sentiments over the regulatory headwinds’ waning and prospect of more macroeconomic stimulus, especially those to revive the ailing property market.

Earlier this month, China’s financial regulators announced end of a years-long regulatory revamp on Alibaba’s fintech affiliate Ant Group with nearly US$1 billion in penalties. At a meeting held on the heels of announcing the milestone of Ant later, Chinese Premier Li Qiang called on online platform operators to better empower the real economy, create jobs and proactively fulfill their social responsibilities.

The Communist Party of China Central Committee and the State Council last week released a guideline to boost the private sector, suggesting Beijing focus more on private businesses, especially internet companies, to revitalize economy.The guideline proposed a series of measures to help private companies to increase their international competitiveness, such as to support their R&D expansion into key components and high-end finished products, to facilitate their operation expansion overseas, to give more support for their protection from trade protectionism, unilateralism and other external challenges, to formulate the collaborative risk management mechanism across authorities for the personal and property safety of entrepreneurs.

At a meeting of the Communist Party's Politburo Bureau held on Monday, policymakers vowed to adapt to major changes in the demand-supply dynamics in the property market, adjust and optimize policies in a timely manner, adopt city-specific measures to better make use of policy toolkit and meet residents’ essential dwelling demand and their needs for better housing, and facilitate a steady and healthy growth of the property market. The meeting emphasized it is necessary to actively expand domestic demand, and it is essential to boost the consumption of bulk commodities such as automobiles, electronic products and household goods, and promote the consumption of services.

The Politburo’s July meeting tends to set the tone for China’s economic policies for the second half of the year. Following the key meeting on Monday, Ni Hong, the Minister of Housing and Urban-Rural Development, called for continuous cementing the steady recovery trend of the property market. The minister asked for fully implementing favorable measures, such as lowering down payment ratios and mortgage rates for first-time home buyers, treating homebuyers who had paid off previous mortgages to be first-time purchasers. State media Xinhua News Agency reported Ni’s ministry has said stability of the construction and property sectors plays a critical role in promoting a broader economic recovery.