China H Shares Jump to Two-Year High as Financial Firms Rally

Updated on
  • Ping An, China Pacific surge more than 7% to lead insurers
  • Brokerages climb amid bets new asset curbs will boost shares

Chinese stocks glowed red hot in Hong Kong on Tuesday, with heavyweight Ping An Insurance Group Co. and China Pacific Insurance Group Co. surging more than 7 percent amid optimism over earnings growth.

The Hang Seng China Enterprises Index jumped 2.9 percent for its best gain in seven weeks, while turnover on the Hong Kong exchange was the highest since July 2015. Ping An rallied the most in four years, and Tencent Holdings Ltd. overtook Facebook Inc. in market value. The CSI 300 Index of large-cap shares on the mainland climbed 1.8 percent as consumer companies gained.

China’s stock markets initially sold off on Monday after the government announced plans to rein in shadow banks, but investor caution has given way to optimism the curbs weren’t as strict as expected and could benefit investments such as equities. Stocks in Hong Kong have been some the world’s best performers this year amid inflows from mainland investors.

“The flow to Hong Kong stocks has been strong and it is hard to stop,” said Ben Kwong, executive director at KGI Asia Ltd.

Ping An’s shares have more than doubled in both Hong Kong and Shanghai this year. The company’s chief financial officer Jason Yao on Monday said Ping An’s valuation had room to increase as Internet technology units are gradually spun off for their own listings.

Financial sector stocks stood out Tuesday, occupying nine of the top 10 spots on the Hang Seng China Enterprises Index. Citic Securities Co. added 6.8 percent, the most in two months, while Huatai Securities Co. and New China Life Insurance Co. both advanced more than 5 percent.

“Hong Kong valuations are still attractive and H-share financials look like a safe bet,” said Sam Chi Yung, a Hong Kong-based senior strategist with South China Financial Holdings Ltd.

— With assistance by Amanda Wang, and Jeanny Yu

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