Techs at high on Tencent buyback

Chinese technology stocks rallied to their highest level in more than a month after a new round of share buybacks by Tencent (0700), which urged the government to regulate the selling and renting of mobile game platforms.

The Hang Seng Tech Index advanced 1.6 percent yesterday to the highest since late July, extending gains from last month's low to around 17 percent. The biggest point contributors included Meituan (3690), Tencent and Alibaba (9988).

Tencent stepping into the market to buy back shares worth HK$100.5 million spurred traders to pile into the market this week. Fewer warnings and more targeted regulations by Beijing in recent days also provided relief.

"The lack of more bad regulatory news plus company share repurchases the last few days may be underpinning a continued shift in investor sentiment to being more constructive on China's tech stocks," said Bloomberg Intelligence analyst Matthew Kanterman.

Tencent has been repurchasing its shares in the public market almost daily since announcing second-quarter earnings results on August 18. The tech bellwether has bought back a combined 2.2 million shares since at an average price of HK$464 per share.

Shares of Tencent rose 2.08 percent yesterday and Meituan grew 4.04 percent to HK$257.40. Short-video platform Kuaishou (1024) even skyrocketed 9.33 percent.

Among the blue chips, Chinese sportswear maker Li Ning (2331) was the top gainer, whose shares surged 7.27 percent, at HK$107.7.

The rebounding performance of Chinese new-economy stocks also came after Vice Premier Liu He made a strong pledge to continue supporting private businesses following a spate of regulatory crackdowns in sectors from after-school tutoring to Internet platforms rocked financial markets.