China Inflation Reports Confirm Ongoing Deflation Trend, Tencent Holdings Accelerates Stock Repurchases

Li Chen
09 Jan, 2025
Hong Kong

Stock market indexes in China and Hong Kong bounced around six-month lows amid persistent deflation worries and a lack of development in implementing the previously announced fiscal stimulus measures. 

The Hang Seng index edged up 0.1%, and the mainland-focused CSI 300 index increased a fraction as investors remained cautious ahead of the start of the earnings season. 

China continues to battle deflationary conditions despite the central bank's supportive monetary policy and fiscal measures announced by policymakers. 

The latest inflation reports released by the National Bureau of Statistics confirmed stable economic conditions, but the lack of consumer demand growth underscored weak price momentum. 

The annual consumer price inflation slowed for the fourth month in a row to 0.1% in December and fell to the level last seen in March.

Consumer prices rose 0.2% for 2024, matching the rate in 2023. 

Producer price inflation in December fell 2.3%, a smaller decline than 2.5% in the previous month, and prices fell for the 27th month in a row. 

For the full year, producer prices contracted 2.2% in 2024. 

 

China Stock Movers 

The Hang Seng index increased 0.1% to 19,289.38, and the mainland-focused CSI 300 index gained 0.1% to 3,793.06. 

Tencent Holdings Ltd. increased 1.4% to HK $374.60 after the third-largest Hong Kong-listed company stepped up its stock repurchase. 

The parent company of WeChat acquired HK$3.7 billion of its own stock in the previous week following a decline of more than 15% over the last two weeks, according to filings with the exchange. 

Two newly listed companies began trading on the Hong Kong Stock Exchange, increasing the list of 2025's initial public offerings to three. 

ContiOcean Environment Tech edged up 4% to HK$33.45 after the maritime technology company sold 10 million shares at HK$31.80 per share. 

The company's HK$318 million initial public offering was oversubscribed 54 times, but foreign investor participation was less than expected. 

Anhui Conch Material Technology dropped more than 43% to HK$1,640 after the company priced its initial public offering. 

Fine chemical materials supplier priced a 145 million share offering at HK $3.0 per share, and the public issue was oversubscribed by 25 times.