Hong Kong brokerage shares rallied after China’s Vice Premier Li Keqiang introduced new measures for cross-border investing and pledged support for the city’s financial industry.
Guotai Junan International Holdings Ltd., a brokerage operating in Hong Kong and China, surged 13 percent as of the midday trading break in Hong Kong and was poised for a record gain. China Everbright Ltd. climbed 9.4 percent. The two companies posted the biggest advances among stocks in the Hang Seng Composite Index.
China will commit an initial 20 billion yuan ($3.1 billion) quota for Hong Kong companies to invest in the nation’s securities and allow an exchange-traded fund linked to Hong Kong stocks, Li said at an economic forum in Hong Kong today. He also said China will expand the size of offshore bond sales by Chinese companies and support the use of yuan for foreign direct investment in the nation.
“The remarks were a catalyst for these stocks, enabling them to rebound,” Ivan Li, deputy head of Hong Kong research at Kim Eng Securities Hong Kong Ltd., said by telephone today. “The market had been expecting Chinese securities firms in Hong Kong to be among the first overseas brokerages to invest in China’s domestic equity market.”
Haitong Securities Co., the parent of Haitong International Securities Group Ltd., was ranked fifth among local securities firms in China domestic equity and rights offerings last year, according to data compiled by Bloomberg. Haitong International jumped 16 percent to HK$4.19 today.
Guotai Junan Securities Co., which is owned by Guotai Junan International, took the eighth spot in the ranking of China equity sales, the data show. Guotai Junan International shares rose 13 percent to HK$2.96. China Everbright climbed 9.4 percent to HK$12.34.