Chinese stocks surge as the State Council shows support for opening-up, overseas listing

March 16, 2022 0 Comments

Mainland Chinese stocks posted strong gains on Wednesday, with the Shanghai Composite up 3.48% to end at 3,170.71 and the Shenzhen Composite soaring 4.019% to 12,000.96. Hong Kong’s Hang Seng Tech Index, which tracks Chinese tech giants including Alibaba, Tencent and Meituan, surged 22%

The surge comes after China’s top policymakers assured markets of stability and support. Previously, regulatory uncertainties and a grim economic outlook had already devastated China’s stock market, as well as US-listed Chinese stocks.

Citing a financial stability conference under the State Council chaired by Vice Premier Liu He on Wednesday, Xinhua news agency reported that China vowed to persist in deepening reforms and expanding opening up, balancing covid-19 prevention and control with economic development, keeping the economy operating within a reasonable range and the capital market running smoothly, 

China continues to support companies seeking overseas listing, and for US-listed Chinese companies, regulators from China and the US have made excellent progress and are working on developing a specific cooperation plan, said the report.

In order to strive toward financial market stability in Hong Kong, the Mainland and Hong Kong regulators should improve communication and collaboration.

According to the report, the meeting also pointed out that the regulatory authorities should steadily move forward the rectification of large platform companies, promote a stable and healthy platform economy, and enhance those companies’ international competitiveness.

The meeting came a day after China stocks slumped to 21-month lows and mainland firms listed in Hong Kong plumbed 2008 lows, according to Reuters.

Rising domestic COVID-19 cases, worries of a fallout from China’s connections with sanctions-hit Russia, and regulatory crackdowns, including the possibility of more mainland firms being delisted by US exchanges, have all weighed heavily on Chinese stocks this year.

JPMorgan Chase & Co downgraded 28 Chinese stocks listed in the United States and Hong Kong on Monday, citing “China’s geopolitical risks” as “more and more countries and corporates impose sanctions on Russia.”

Leave a Reply

Your email address will not be published.