A Rebound In Bank Stocks Lead China Indexes Higher

Li Chen
18 Nov, 2024
Hong Kong

Stock market indexes in mainland China and Hong Kong advanced following a rise in banks and tech stocks. 

The Hang Seng index advanced 1%, and the mainland-focused CSI 300 index added 0.9%, but market sentiment remained shaky amid rising geopolitical tensions. 

Market indexes have been under pressure over the last seven weeks after politicians and policymakers failed to follow through with "whatever it takes" fiscal stimulus. 

In addition, market sentiment was shaky on the worry that the next U.S. administration is likely to ramp up trade tariffs on goods made in China and made by Chinese companies in Vietnam, Malaysia, and Mexico. 

Banks traded higher after the China Securities Regulatory Commission urged banks to disclose plans to lift their stock prices above the book value. 

The regulatory agency released a statement after the market close on Friday and urged company boards to take an active role in lifting their stock prices. 

Over the last 12 years, leading nine Chinese banks have traded below their book value, reflecting investor concerns about lurking bad loans in the property sector and obligations to the central government for national priority projects. 

Of the total of 29 banks traded in mainland China, about 22 are trading below their book value as investors worry that bad loans issued to state-controlled property developers are not fully reflected in their financial statements. 

 

China Stock Movers 

The Hang Seng index increased 1% to 19,619.87, and the mainland-focused CSI 300 index advanced 0.9% to 4,002.89. 

China Merchants Bank increased 0.7% to ¥38.11, ICBC gained 2.9% to HK $4.72, China Construction Bank gained 0.6% to HK $6.03, and Bank of China added 3.9% to HK $3.75. 

Property stocks traded higher in the hopes of additional reforms from the People's Bank of China and policymakers.

China Vanke increased 2.5% to HK $6.56, China Resources Land gained 1.7% to HK $24.05, and Longfor Group Holdings edged up 0.3% to HK $11.40. 

Alibaba Group Holding declined 1.9% to HK $85.60 after the e-commerce platform operator reported weaker-than-expected quarterly results. 

JD.com jumped 4% to HK $138.0, and Tencent Holdings advanced 0.8% to HK $404.20.