China Stocks Ride Earnings Wave, Li Ka-shing Controlled Companies Acquires Ireland's Phoenix Energy

Li Chen
25 Apr, 2024
Hong Kong

Stocks in Shanghai edged slightly higher, and those in Hong Kong gained on the optimism about growing interest from foreign investors. 

Market indexes in Shanghai advanced as investors brace for corporate results, and investors are hoping that quarterly results would exceed lowered expectations. 

Stocks in Hong Kong advanced after foreign investors increased their holdings of Chinese stocks, and mainland investors also added exposure for the 19th consecutive session.

Investor sentiment was cautiously optimistic after a Chinese regulatory agency announced support for mainland companies to list on the Hong Kong Stock Exchange. 

Investors overlooked rising tensions between China and the U.S. after President Joe Biden approved the divestment of a stake in video-sharing platform TikTok. 

The CSI 300 index increased 0.2% to 3,530.09, and the Hang Seng Index rose 0.6% to 17,295.93. 

CK Asset Holdings gained 1.5% to HK$32.75, and CK Infrastructure Holdings jumped 0.6% to HK$44.60 after the two companies controlled by Li Ka-shing formed a consortium to acquire the largest natural gas network operator in Northern Ireland, Phoenix Energy.

CK Assets and CK Infrastructure will own 40% each, and Power Assets Holdings, the international energy investment unit controlled by Li Ka-Shing, will hold the remaining 20%. 

The three-company consortium agreed to pay $940 million, or £757 million, to acquire the holdings controlled by NatWest Group Pension Fund and Utilities Trust of Australia. 

Hong Kong Exchanges and Clearing Limited increased 3.6% to HK$247.80 after the stock exchange operator reported earnings during Wednesday's lunch break.

Revenue in the first quarter ending in March declined 6% to HK$5.2 billion, or $664 million, and net profit fell 13% to HK$2.97 billion, or $356 million. 

The average daily trading volume in the period fell by 22%, and the company blamed the decline on continued geopolitical tensions and macroeconomic volatility. 

Weaker trading revenue and listing fees negatively impacted first-quarter revenue, but the exchange operator said in a statement that 85 companies are looking to list their stocks on the bourse in the near future.

A total of 12 companies raised HK$4.7 billion, a decline of 28% from a year ago, according to the data compiled by Ticker.com. 

Lenovo Group added 3.4% to HK$8.92; SMIC added 2.2% to HK$15.16; and SenseTime Group jumped 10% to HK$0.88. 

China Overseas Land & Investment reported first quarter profit rose 14% from a year ago, lifting property stocks in Hong Kong.

China Vanke gained 1% to HK$3.89, and Longfor Group added 3.9% to HK$9.78. 

Elsewhere in Asia, markets traded lower tracking losses in overnight trading in New York, and tech stocks dropped after Facebook-parent Meta Platform's guidance fell short of market expectations. 

Benchmark indexes in Tokyo declined 1.5% ahead of the Bank of Japan's monetary policy decisions on Friday. 

The KOSPI index in Seoul declined 1%, and South Korea's economy expanded by 3.4% in the March quarter from a year ago, following a 2.2% increase in the fourth quarter. 

The economy expanded at the fastest pace since the fourth quarter of 2021, driven by higher consumption of goods and services and a sustained increase in exports of tech products.