China tech stocks in Hong Kong surge amid hopes of easing regulations
While the Hang Seng Index displays on screens outside Exchange Square, the Hong Kong Stock Exchange complex in Hong Kong, China, the flags of Hong Kong and China flutter.
Zhang Wei | China News Service via Getty Images
Hong Kong shares of Chinese internet companies rose on Wednesday. This is a continuation of a upward trend that began around one week ago.
SChinese Smartphone Makers: Hares XiaomiAlso, the stock rose 6.06% following Tuesday’s announcement that plans were made to purchase shares on open markets “from time-to-time” for a maximum price of 10 million Hong Kong dollars ($1.28billion). Xiaomi reported a 21% increase in revenue for its fourth quarter, compared to the previous year.
Although the Hang Seng Tech Index gained 3.23% year-to-date, it is still more than 15% below its previous level.
The stock market in Hong Kong has been trending higher ever since the announcement of a state media report last WednesdaySupport for Chinese shares
The article stated that regulators must “complete as quickly as possible” their crackdown on the internet platform companies.
Announcements share buybacks by tech firms such as AlibabaRecent developments by Xiaomi have likely boosted investor sentiment.
Tai Hui, JPMorgan Asset Management, said that the Chinese government has made regulatory changes, especially on internet businesses, which have had a negative impact on Chinese stocks.
Tai, Asia-market strategist, said, “The government will need to show being predictable and transparent when making real changes in life. This can take time.” Investors will be able to see how the rule changes affect their long-term earnings potential by analyzing financial performance over the next quarter.