China’s pledge to encourage the country’s leading companies to go public in Hong Kong is helping fuel a rare $5 trillion stock market surge, but dealmakers aren’t ready to get bullish yet.
The Hang Seng Index rose about 9% last week, its best gain since 2011, after China’s securities regulator said on April 19 it will support initial public offerings in Hong Kong. Exchange operator Hong Kong Exchanges & Clearing was among the biggest gainers, up 17%.
While a number of factors drove the index’s gains, including analysts’ bullish calls on China and an influx of mainland investors looking to hedge against a weakening yuan, the regulator’s comments sent a signal that the city is in a more favorable could expect policy to strengthen its position as a financial sector. center.
