Dragon bounce as HKEX defends bourse

Hong Kong shares closed higher on the first trading day of the Year of the Dragon with the bourse's chair, Laura Cha Shih May-lung, disagreeing that the stock market has fizzled.

Swinging from a low opening the Hang Seng Index ended at 15,879 points, or 0.84 percent higher than the previous close, giving the market a good start for the fifth consecutive Year of the Dragon.

The market was powered by Chinese tech giants and Macau casinos.

Meituan climbed 4.5 percent on sales growth during the holiday, the best-performing blue chip member yesterday.

HSI outperformed peers in Japan and South Korea, which fell on disappointing US January inflation. But the rise was weak, with the bourse staying below the 16,000-point bar with a turnover of only HK$57 billion as mainland markets remained closed.

This happened as Stephen Roach, former chair of Morgan Stanley Asia, wrote that "Hong Kong is over" with a warning the market might "remain in the mire" until seeing convincing stimuli from Beijing.

Once seen as a good friend of China, Roach said he is pained to draw this conclusion, but he does not see an easy way out for Hong Kong from the Sino-US rivalry and the worrying Chinese economic recovery.

Previously, Hong Kong was mocked that it has become an international financial ruin due to the sluggish stock markets.

In response, Hong Kong Exchanges and Clearing chair Cha said Hong Kong's advantages remain and it will continue to benefit from China's growth.

HKEX chief executive Nicolas Aguzin said Hong Kong still has many opportunities in the longer term, despite the macro headwinds ahead.

Cha and Aguzin, to step down this year, hosted their last market opening ceremony yesterday as the chair and the CEO of the bourse, respectively.

At the same event, Financial Secretary Paul Chan Mo-po said he believes the stock market may benefit from the powerful Chinese dragon after a 28 percent slump in the Year of Rabbit.

Chan also expects the Hong Kong-listed equity exchange-traded funds could go public in Saudi Arabia's market after inviting the first Saudi Arabian ETF in Asia to its market last year.

Additionally, China Evergrande plunged 7.8 percent after its mainland real estate arm was condemned by the bourses in Shanghai and Shenzhen for failing to submit financial reports on time.

WuXi AppTec and WuXi Biologics were the worst-performing blue chips after diving about 19 percent and nine percent respectively despite objections to allegations from a group of US lawmakers.

themis.qi@singtaonewscorp.com

Editorial: Will HK doom-monger be proved wrong?