Hong Kong Market gains ahead of an increase in MSCI's weighting

Hong Kong share market closed higher on Tuesday, 28 May 2019, as investors risk sentiments boosted by reports of MSCI's increase of Chinese A-shares weighting into its global indexes. At closing bell, the Hang Seng Index inclined 0.38%, or 102.72 points, to 27,390.81. The Hang Seng China Enterprises Index was up 0.13%, or 13.79 points, to 10,416.55.

Global index provider MSCI's decision on raising the inclusion factor of all large-cap China A-shares in the MSCI indexes from the current 5 percent to 10 percent has taken effect after market close on Tuesday.

Driven by the index inclusion, northbound trading of the "Stock Connect" programs between the Shanghai and Hong Kong exchanges and the Shenzhen and Hong Kong exchanges saw net capital inflow totaling 7.49 billion yuan on Tuesday, reversing the outflow trend for several days.

 

The index provider said in March that it would further increase the inclusion factor of A-shares to 20 percent in August and November, each time upping the representation of Chinese large-cap stocks by 5 percentage points.

Automakers shares soared after the Guangdong province announced measures to boost the auto industry. Geely Automobile (00175) surged 5% to HK$13.06. GAC Group (02238) soared 6.4% to HK$7.63. Brilliance China Automotive (01114) advanced 4.7% to HK$7.43. BYD (01211) jumped 4.5% to HK$47.35. BAIC Motor Corporation (01958) gained 4.9% to HK$4.71. Great Wall Motor (02333) elevated 4.1% to HK$5.62. Dongfeng Motor Group (00489) rose 1.6% to HK$6.55.

Shares of passenger vehicle dealers and after-sales services providers were also higher. China Yongda Automobiles (03669) soared 10.3% to HK$6.42. Zhongsheng Group (00881) climbed 7.3% to HK$19.24. China ZhengTong Auto Services (01728) gained 5.3% to HK$3.21. China Harmony New Energy Auto (03836) swelled 5.7% to HK$2.6.

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