As the flood of Chinese money pours into Hong Kong, shares in the city are rising indiscriminately across industries, driving the Hang Seng Composite Index toward a seven-year high.
“A rising tide lifts all boats,” said Warren Lau, an analyst with Maybank Kim Eng Securities in Hong Kong. “This is a liquidity-driven market.”
Below are the top performers on the Hang Seng Composite since yesterday. Gains are as of the midday trading break in Hong Kong.
Gome Electric Appliances Holding Ltd.: Up 60 percent. The electronics retailer operates more than 1,000 stores across China. According to Citigroup Inc. analysts led by Eric Lau, Gome’s valuations stood out as cheap when compared with direct China-listed rivals. It counts its billionaire founder Huang Guangyu, China’s richest man before he was sentenced to 14 years in prison for graft in 2010, as its biggest shareholder.
Alibaba Pictures Group Ltd.: Up 54 percent. Alibaba Group Holding Ltd.’s movie unit. Chairman Jack Ma is seeking to acquire more content amid the surge in China’s online video market. Alibaba Group is also considering folding its online movie ticketing business and a movie crowd-funding platform into Alibaba Pictures, the parent said in a filing Wednesday.
CSR Corp. & China CNR Corp.: Up 56 percent and 54 percent, respectively. The two train makers are set to merge as part of China’s strategy to create industry champions that can compete internationally. The combined company should be a major beneficiary of President Xi Jinping’s “One Belt, One Road” plan to build tighter trade links across Asia and Europe.
Haitong International Securities Group Ltd.: Up 43 percent. The Hong Kong-based company offers wealth management, corporate finance and brokerage services to more than 4.6 million retail clients, as well as 12,000 institutional and high-net worth clients in China, according to its website. CICC analysts wrote in a report yesterday that its parent company, Shanghai-listed Haitong Securities, was among financial stocks to benefit from the Shenzhen-Hong Kong stock connect.