Hang Seng Index Trade at an 8-month High; New Listing Applications Rebound in Hong Kong

Li Chen
10 May, 2024
Mumbai

Market indexes in Shanghai and Hong Kong advanced for the second day in a row in hopes that the government will follow through on its market-supportive measures. 

The benchmark index in Shanghai extended weekly gains to 0.4%, and the index in Hong Kong advanced more than 2%.

The Hang Seng index traded at an eight-month high after Hong Kong Exchange & Clearing chief Bonnie Chan Yitin said listing applications are ahead of last year's level. 

Moreover, marker sentiment was bolstered by speculation that the Chinese regulators would scrap a 20% tax on dividends paid to mainland China investors, lifting dividend-paying stocks. 

In overnight trading, stocks in New York advanced after the latest weekly jobless claims rose to the highest level since August 2023, suggesting that the Federal Reserve may have more room to maneuver in lowering interest rates. 

The CSI 300 index jumped 0.1% to 3,667.67, and the Hang Seng index soared 2.2% to 18,950.99. 

Hong Kong Exchange & Clearing jumped 7.2% to HK$284.60 after the newly appointed chief executive said new company listing applications soared to 100 in the year so far. 

The number of applications jumped 30% from a year ago in the first quarter to 60 after the Chinese regulators announced more supportive measures for Hong Kong listings. 

Semiconductor Manufacturing International rose 1.4% to HK$16.24 after the advanced chip maker reported a 23% increase in revenue in the first quarter. 

Dividend-paying stocks were the focus of speculation that the China Securities Regulatory Commission and the State Taxation Administration are likely to remove the 20% dividend tax charge on stocks that mainland investors can invest in through the Stock Connect program. 

China Resource Power jumped 4.5% to HK$20.80, China Construction Bank advanced 5.5% to HK$5.60, and Heng Sang Bank of China jumped 2.2% to HK$108.60. 

Electric vehicle makers traded lower on the worry that the intense price pressure could dent weak margins further. 

BYD declined 3.4% to HK$222.40, Li Auto dropped 2.4% to HK$104.80, and Xpeng eased 1.4% to HK$31.55.