(Bloomberg)-The possible meeting this week between President Xi Jinping and the e-commerce icon, Jack Ma, after technology shares managed, can be the next catalyst that extends the gathering in China’s shares.
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People familiar with the matter said last week that prominent entrepreneurs, including MA, were invited to meet the country’s leading leaders. The possible offer to support the private sector coincides with the recent increase in stocks in Hong Kong, driven by increasing capabilities in artificial intelligence.
The Hang Seng China Enterprises Index extended on Monday, after arriving at its highest level since February 2022 last Friday. The scale was 1.7 % before its trim. The Hong Kong technology scale entered a market for wearing earlier this month, supported by the Chinese AI model, which was welcomed as the game changing.
“This prominent support sends a clear message of support from the Chinese government, which sees the technology sector as a future letter of economic growth,” said Robert Leah, intelligence analyst in Bloomberg.
One of the main drivers of the gathering is the Alibaba Group Holding Ltd. Group. The shares listed in Hong Kong increased around 60 % since January 13. The company said it merges Chatbot artificial intelligence in Dibsic in WeChat. The stock increased by approximately 40 % from the lowest level in January.
Some investors say the assembly is crowded and an extension, but Xi’s support will be a batch of confidence for Chinese stock markets and Hong Kong, which costs $ 16 trillion, which has fixed gains since mid -January.
“The recent developments are in our expectations for a short -term trading opportunity in the Chinese stock market, instead of indicating a structural shift,” said Nenad Denick, a stock expert at Bank Julius Bayer in Zurich. “However, without new motivations of profits, flow of liquidity or policy signals, the risk of decline increases.”
The meeting that included Xi and MA can be a pivotal turning point for Albaba since Beijing Ant Group Co. Check in the sector that has grown, it may be large and strong to rest. It will also send a strong indication that the Chinese Communist Party is adopting a more supportive position towards private sector companies.
A clear message
“The presence of Jack Ma in particular will provide a symbolic end to the suppression of the technology sector, which began with it in 2020,” said Christopher Bedor, deputy director of research in China at the Bodal Company in Hong Kong. In practice, the campaign has ended for a while now. But Xi optics tell MA and other technology leaders to go out and prosperity will send a clear message that the government’s position has been completely reversed. “
China is well aware that innovation is the main driver for productivity growth. Xi has constantly pushed “new fruitful powers” amid US restrictions on high -end chips to China. This only causes Beijing to double efforts in self -sufficiency in advanced technology.
The technology index evaluation does not seem to be mercury, given that Gauge Hang Seng Tech is circulating with profits to the front 18.2 times, compared to 44.9 times four years ago.
Meanwhile, futures in China, which lasted for the third consecutive day, decreased to the lowest level since late January, due to external flows to stocks and narrow liquidity in the money market. In the monetary market, the return increased for 10 years to 1.67 %.
“Chinese stocks have been traded with very depressed assessments with most of the risks that were well discussed and reflected in prices,” said Sandy B, a portfolio of China’s wallet in Hermes, unified. The Deepseek event was an incentive, which strengthened feelings about Chinese stocks. Despite the last performance, the market is still attractive. “
Deepseek has effectively strengthened the feelings of investors in the technology sector in China, and the gathering has spread beyond technology in other sectors, including electric car makers and health care companies. This is exactly the opposite of what many Chinese investors have experienced in recent years, waiting for the government to strengthen the stock market, whether through motivation or through commercial purchases by trading investment funds known to prefer the so -called “national team”. “
Raise strategists at Goldman Sachs Group Inc. Their goals for MSCI China and CSI 300, expecting gains from here. Strategists, including Kings Lao, wrote in a memorandum dated on Monday.
-With the help of Lusail Liu, Henry Ren, Cecil Fanchi, Colom Murphy, John Cheng, Tian Chen and Jeon Lee.
(Market movements, adds Goldman’s comments in the final paragraph.)
