Tencent, Alibaba, AIA fuel Hong Kong market rally while BeiGene erases loss amid Silicon Valley Bank fallout

March 13, 2023 at 5:30 AM·3 min read

Hong Kong stocks advanced amid a bullish view on earnings among Chinese tech leaders, overshadowing concerns about a wider fallout among Chinese biotech companies including BeiGene from the collapse of Silicon Valley Bank. HSBC gained after buying the UK unit of the US bank.

The Hang Seng Index rose 2 per cent to 19,695.97 at the close of Monday trading, while the Tech Index surged 2.9 per cent and the Shanghai Composite Index added 1 per cent. The city's benchmark index slumped 6.1 per cent last week, the most since October.

Tencent jumped 4 per cent to HK$344.80, while Alibaba Group added 2.6 per cent to HK$83.25. Insurer AIA Group strengthened 3.6 per cent to HK$84.45 and China Mobile rallied 4.6 per cent to HK$64.85.

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Xpeng appreciated 2.6 per cent to HK$33.25 after joining the Hang Seng China Enterprises Index, which tracks the biggest mainland Chinese companies. Weibo, the Chinese microblogging platform operator, surged 4.7 per cent to HK$134.90 on its entry into the Hang Seng Tech Index.

While companies in Asia-Pacific excluding Japan posted record misses in fourth-quarter earnings, China, Singapore, Philippines and Indonesia have been the bright spots with results tracking above full-year estimates, according to Goldman Sachs.

"Consumer, TMT (telecoms, media and tech), and healthcare services/equipment will lead the recovery in 2023," the Wall Street bank said in a report to clients. "Consensus earnings revisions have recently stabilised but upgrades are still absent, except for TMT."

BeiGene added 0.9 per cent to HK$135, after earlier sliding by as much as 2.4 per cent. The firm said it had 3.9 per cent, or about US$175 million, of its US$4.5 billion cash locked up in SVB. Other companies including Zai Lab, Sirnaomics, MobVista and Noah Holdings reported some exposure in the biggest US bank failure since 2008.

"Investor sentiment is likely to remain fragile in the near term against the background of US banking sector concerns," analysts at Nomura said in a note to clients. "Market focus will likely remain on the fallout from the failure of SVB."

Meanwhile, HSBC fell 0.2 per cent to HK$56.30. The lender bought the UK unit of SVB for a token sum of £1 (US$1.21). The strategic purchase will enhance its access to innovative and fast-growing firms in the global technology and life-science sectors, CEO Noel Quinn said in an exchange filing.

US financial regulators on Sunday moved to reassure all depositors of SVB, following the lender's sudden collapse on Friday following a bank run. The Federal Reserve said it would set up a new lending programme with funds from the Treasury Department, even as tech start-ups worried about paying their staff this month.

Two companies started trading for the first time today. Tongda Smart Tech Xiamen soared 44 per cent to 36.19 yuan in Shenzhen, while Shanghai Research Institute also logged the maximum 44 per cent rise to 16.52 yuan in Shanghai.

Major Asia-Pacific markets were mixed. Japan's Nikkei 225 tumbled 1.1 per cent, South Korea's Kospi added 0.7 per cent, while Australia's S&P/ASX 200 lost 0.5 per cent.

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