China¡¯s vow to encourage the nation¡¯s leading companies to list in Hong Kong is helping spur a rare surge in the $5 trillion stock market, but dealmakers aren¡¯t ready to turn optimistic.
The Hang Seng Index jumped about 9% last week for its best gain since 2011 after China¡¯s securities regulator said on April 19 that it will support initial public offerings in Hong Kong. Bourse operator Hong Kong Exchanges & Clearing was among the biggest winners, rallying 17%.
While a number of factors drove the index¡¯s gains, including bullish analyst calls on China and inflows by mainland investors seeking a hedge against a weakening yuan, the regulator¡¯s comments sent a signal that the city could expect more favorable policies to strengthen its position as a finance hub.
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