Hong Kong stocks jump by most in 7 weeks as Alibaba, tech index rebound while Chinese Estates soars on privatisation bid

  • Alibaba Group leads Chinese Big Tech rally with a 5.6 per cent rebound after a 34 per cent slide to record low over the past three months
  • Chinese Estates surges 30 per cent as family of billionaire owner Joseph Lau bids to take Hong Kong developer private

Hong Kong stocks surged by the most in almost seven weeks as Alibaba Group Holding paced a rebound in tech stocks from an all-time low. Chinese Estates Holdings surged on a take-private offer from its controlling shareholder.

The Hang Seng Index rose 2.4 per cent to 24,548.44 as of 11.30am local time for its biggest one-day rally since a 2.5 per cent gain on August 24. The Hang Seng Tech Index soared 4.3 per cent, poised for its best day in three weeks.

Alibaba, the owner of this newspaper, rallied 5.6 per cent to HK$145 after losing 34 per cent to a record-low in the past three months through Wednesday.

Local stocks climbed from a one-year low amid efforts to thaw the US-China relations as senior security officials from both sides met in Zurich and The Wall Street Journal said President Joe Biden and his counterpart Xi Jinping will hold a virtual meeting before the end of the year.

The rebound followed an almost US$1 trillion erosion in Hong Kong’s market capitalisation in successive monthly sell-off since May as investors sweated over the debt crisis at China Evergrande and the possible contagion effects. Since then, another developer Fantasia Holdings has defaulted on a dollar bond.

Hong Kong-based developer Chinese Estates rallied 30 per cent to HK$3.78 after its controlling shareholder offered to take the company private. The family of tycoon Joseph Lau, which owns 78.6 per cent of the group, offered HK$4 each to buy the rest of the company, an 83.5 per cent premium over its last-traded price.

Other property developers advanced a day after Chief Executive Carrie Lam Cheng Yuet-ngor unveiled plans to develop a 300 sq km hub bordering Shenzhen, known as Northern Metropolis. The Hang Seng Property Index rose 2.3 per cent, with Henderson Land and New World Development rising by at least 2.5 per cent.

“We expect a relief rebound to continue post the CE’s last policy address mainly due to overhang on Beijing government influencing Hong Kong policy gradually removed,” UOB Kayhian said in a note on Thursday. “New World could also be a key beneficiary of the Northern Metropolis as more than 90 per cent of its farmland is located in the area.”

Tam Jai International, which operates a chain of restaurants in Hong Kong, Singapore and mainland China, slumped 7.8 per cent to HK$3.06 on its first day of trading.

Markets in Asia-Pacific also saw big gains. Benchmarks in South Korea and Japan advanced by 1.6 per cent while equities in Australia climbed 0.5 per cent following overnight gains in US markets.

Author: Cheryl Heng, SCMP

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