HONG KONG: Hong Kong and mainland stocks witnessed mixed performance in holiday-resumed trading on Wednesday, with companies linked to the Xiongan New Area rising by their daily limits. The Hang Seng Index slipped 0.2 per cent to 24,216 at the lunchtime break, retreating from its gains earlier in the morning session. The Hang Seng China Enterprises Index fell 0.3 per cent to 10,287.9. Among A-share markets, the Shanghai Composite Index surged 1 per cent to 3,256.7, while the Shenzhen Component Index rose 1.6 per cent to 10,595.2. Wednesday’s trade reflects the first open for markets in Shenzhen and Shanghai this week, as well as the resumed trading of their stock connect schemes with Hong Kong. Nearly 40 Hebei-based stocks jumped by their daily 10 per cent limit on the A-share markets, amid expectations of government stimulus to build up the Xiongan New Area in Hebei, according to Wind Information.
Shanghai-listed property developer China Fortune Land Development, which has land holdings in Xiongan, rose by its 10 per cent limit to 29.99 yuan. Beijing Properties Holdings soared 13.2 per cent to HK$0.43. Beijing-based cement maker BBMG Corp saw its Hong Kong-listed shares go up 9.2 per cent to HK$4.8, adding to a 35 per cent gain on Monday. The company’s Shanghai-listed shares rose by their maximum 10 per cent limit for a single session of trade. Tianjin Port was limit-up 10 per cent to 12.9 yuan upon the opening of trade in Shanghai. China Gas Holdings at one stage climbed 10 per cent to HK$13.98, its highest level since April 2015, following a statement on Tuesday that it has entered into a clean energy strategic cooperation framework agreement with seven cities in Beijing-Tianjin-Hebei region. The rally unfolded even as regulators in Hebei prohibited home purchases in the Xiongan New Area. In a related note of caution, several listed Hebei companies announced that the New Area won’t bring fundamental change to their businesses.
President Xi Jinping will push to create a new district in northern Hebei province – about 160 kilometres south of Beijing – to rival the two special economic zones founded in southern China by his predecessors Deng Xiaoping and Jiang Zemin, state media Xinhua reported on Saturday. “This is a long-term stimulus for the related stocks. But so far investors haven’t found a clear focus and just speculated on any stock that seems to have a story with Xiongan,” Linus Yip Sheung-chi, chief strategist at First Shanghai Securities, said. Developers with land holdings should be the “most certain” beneficiaries despite recent government intervention, yet peer competition will be much higher for cement and construction sectors, Yip said.
Markets in Hong Kong and mainland China were also looking ahead to the first official summit meeting between President Xi Jinping and US President Donald Trump, scheduled to take place in Florida on Thursday and Friday. “It’s crucial whether the two leaders would be friendly to each other during the talks, which will signal the future relationship between the two countries,” Yip said. Among other sharp movers, FIH Mobile shares tumbled 12.8 per cent to HK$2.7, after it announced to expect a net loss of less than US$110 million for the first half in 2017 due to the cost of acquiring Nokia assets from Microsoft, compared with a net profit for the first six months last year. China Unicom requested a halt in trading of its shares pending the release of an announcement, sparking speculation that it may announce a plan for mixed ownership reform.
