Read More
Having slumped under the weight of a U.S. executive order, China’s three major telecommunications companies are on the rebound in Hong Kong – supported by mainland cash.
ADVERTISEMENT
SCROLL TO CONTINUE WITH CONTENT
China Mobile led the gains Monday for the country’s wireless majors, rising by 8.8 percent. Its shares, along with those of China Telecom Corp. and China Unicom Hong Kong Ltd. declined last week as index firms said they would remove them from their gauges to comply with U.S. sanctions, and the New York Stock Exchange said it would delist them.
Mainland buying of Hong Kong stocks through trading links was poised for a record net HK$17.6 billion (US$2.3 billion) as of 3:09 p.m. Monday, according to data compiled by Bloomberg.
On Friday, the three stocks were among the most actively traded through the stock connect.
Mainland investors bought a net HK$11 billion of China Mobile shares, the most among all companies, according to the latest available data from Hong Kong’s exchange.
Semiconductor Manufacturing International Corp., also among Friday’s biggest net buys, has seen its stock price jump by 33 percent over the past four sessions.
“The net buying of China Mobile last week has been so strong and I have never seen it on a scale like this before,” said Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong.
Recent declines among some stocks identified by Washington as having military ties have made valuations attractive, said Kevin Chen, analyst at China Merchants Securities HK Co. “A lot of investors are ramping up to buy them at a very low price now, as this opportunity seldom appears. They are too cheap.”
China Mobile, for example, is trading at around 7 times forward earnings, compared to around 12 times a year ago.
