Hong Kong stocks struck life highs on Thursday as investors bet on rising fund flows from mainland China after Beijing issued new rules allowing fund managers and brokerages to invest in overseas securities.
The news sent bourse operator Hong Kong Exchanges and Clearing to its fifth straight peak while mainland brokerage Shenyin Wanguo rallied as much as 20 percent.
Mainland insurers jumped on hopes they would be next to get the green light to invest abroad under China's Qualified Domestic Institutional Investor (QDII) programme. "Fund flows remain strong and we should not underestimate the strength of this move," said Alex Wong, director at Ample Finance Group. "People are optimistic and confident. The market is overbought, but I think we can still move up."
The market accelerated steadily through the day, zipping past previous peaks without a blink and ending near the day's high. "There was a bit of euphoria," said Miles Remington, head of sales and trading at BNP Paribas. The benchmark Hang Seng Index marked its third-straight all-time high at 21,969.26. The China Enterprises Index of mainland companies listed in Hong Kong scored its fifth-straight record at 12,237.18.
The Hang Seng closed up 1.3 percent, or 270 points, to end at 21,954.67, its fourth-straight closing high. The China Enterprises Index gained 2.5 percent, or 302.49 points to close at 12,207.97.
Mainboard turnover was the third-largest ever at HK$95.9 billion (US $12.3 billion), though well off Wednesday's record HK$121.4 billion. Among insurers, China Life surged 6.3 percent to HK$28.50, while Ping An Insurance jumped 4.6 percent to HK$54. PICC Property and Casualty Ltd rocketed 10.2 percent to end at HK$6.47, just off an all-time high. Hong Kong Exchanges and Clearing rang up a further 7.2 percent gain to end at HK$110.20 in heavy trade, earlier setting a fresh peak at HK$110.80.
Shenyin Wanguo finished near the day's high at HK$7.5, up 19.1 percent. China Mobile, the biggest boost to the blue chips, gained 2.4 percent to HK$82.35. China's Chaoda Modern Agriculture (Holdings) Ltd plunged 9.8 percent to HK$6.80 after the chairman of the organic agricultural firm sold 120 million shares at HK$6.90 each, an 8.5 percent discount to the company's last traded price of HK$7.54. Mainland power producer Datang Power tumbled nearly 7 percent to HK$11.86 in heavy trade, a day after bargain hunters sent its shares soaring more than 10 percent.