Hong Kong shares go up as investors search for indications of new stimulus from China

Share values increase as the excitement for China's tech industry surpasses the dangers posed by the latest US duties on steel and aluminium imports

The surge in share values is due to the increased interest in China's tech industry, which is seen as more significant than the potential threats from the new US import taxes on steel and aluminium.

The Hang Seng Index saw a rise of 1.8 per cent, closing at 21,521.98, this follows a 4.5 per cent rise from the previous week. The Hang Seng Tech Index also saw an increase, jumping 2.7 per cent. The index has seen a total increase of 19 per cent since the beginning of the year, largely due to positive speculation on Chinese tech firms. Meanwhile, the Shanghai Composite Index on the mainland experienced a 0.6 per cent gain.

The food delivery service, Meituan, saw a 5.6 per cent increase in value to HK$162.70, while the short-video platform, Kuaishou Technology, rose by 2.9 per cent to HK$47.65. Additionally, tech car manufacturing company, Xiaomi, experienced a 3 per cent growth to HK$43.75.

In negative news, the power tool manufacturer, Techtronic Industries, saw a decline of 1.9 per cent, bringing its value down to HK$100.30. Similarly, automobile retailer Zhongsheng Group experienced a 1.5 per cent decrease, reducing its stock to HK$13.62. The sportswear label, Li Ning, also faced a downturn of 1.2 per cent, dropping its price to HK$16.

Trump declared on Sunday his intention to impose a 25 per cent tariff on all steel and aluminium imports from every nation into the US. He also mentioned that he would be introducing corresponding tariffs on nations that impose taxes on US imports. These measures could be implemented as early as Tuesday or Wednesday.

Laopu Gold's jewelry is experiencing booming sales, even with the sluggish consumer expenditure in China. Admirers of Laopu Gold appreciate its 'set price' system and detailed artistry.

The company, listed in Hong Kong and with only 36 outlets across Greater China, reported sales of pure gold and gem-set jewelry amounting to 3.5 billion yuan (US$482.7 million) in the first six months of 2024. This represents a 148 percent increase compared to the previous year, as per their interim report. Additionally, their net profit soared almost 200 percent to 588 million yuan in the same timeframe.

Shares of Laopu Gold have increased over 550% since the company first started trading in June, hitting a peak of HK$457 (US$58.7) this Tuesday.

"Wealthy customers are not only less impacted by overall economic situations, but crucially, unlike the typical consumer who purchases gold as an adornment or for use, they also take into account the investment potential of gold items," he stated.

This implies an increase in earnings for Laopu. As stated in their half-year report, the firm's gross profit margin hit 41.3 per cent in the initial six months of 2024, a significant increase compared to Chow Tai Fook's approximate 20 per cent.

Investors demonstrate substantial enthusiasm in utilizing mainland China bonds as repo collateral in Hong Kong. A repo refers to a brief borrowing deal involving the sale of securities with the intention of buying them back later at a marginally increased cost. A repo comprises a temporary borrowing operation where securities are sold and later repurchased at a slightly elevated price.

The recent agreement, which began this Monday, is among the series of policy steps announced last month by mainland and Hong Kong central banks to enhance financial ties across borders. The repo-agreement step had been viewed as a final stage reform to simplify capital flow restrictions, assist overseas investors in boosting their returns and handling liquidity.

A repo, or repurchase agreement, is a brief lending deal where assets are sold with a promise of buying them back later at a slightly increased cost. The transaction provides the seller with funding at a lower interest rate, while the buyer benefits from a favorable return on the collateral, which is usually comprised of short-term, secure and easily convertible assets.

On Monday, financial companies such as Citic Securities International Capital Management, GF Global Capital, and Eastfort Asset Management were some of the earliest investors to finalize offshore yuan repo transactions through their onshore Chinese bonds under the Bond Connect scheme heading northbound, as per Standard Chartered, one of the scheme's 11 market creators in Hong Kong.

The initiative is designed to assist customers in securing yuan liquidity, providing a boost to foreign investors' onshore bond holdings, enhancing capital productivity, increasing the appeal of yuan assets for global investors, and reinforcing Hong Kong's dominant role as a hub for offshore yuan transactions, according to John Thang, the head of markets and strategic client management and solutions for Hong Kong, Greater China, and North Asia at the bank.

Thang mentioned that the bank has gotten numerous inquiries from clients, with a few showing a desire to participate.

Renewable Energy: China to Let Market Determine Solar and Wind Energy Prices

The shift from established rates will 'lay a strong groundwork for the establishment of a consolidated national power market system', according to an analyst.

The cost of electricity generated from renewable sources in mainland China will now be determined by market dynamics instead of being regulated by the government. This move is part of China's efforts to modernize its electricity industry and promote the growth of green energy.

The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) collaboratively released a statement on Sunday, discussing the intensification of "market-based reform" for renewable electricity pricing.

The cost of grid-connected power produced from sustainable resources like wind and solar, which was once set, will now be dictated by market forces in the nation's electricity market, according to the announcements.

"The authorities highlighted that the fixed rates for grid electricity do not accurately represent the supply and demand dynamics in the market due to the widespread growth of renewable energy. They also pointed out these rates fail to contribute to the regulation of the power system."

The NDRC has instructed local authorities to present their respective strategies for the transition before the year concludes.

According to the NEA, by 2024, China's capacity for renewable energy, primarily wind and solar, had reached 1,410 gigawatts (GW). This represented over 40% of the nation's total power capacity, overtaking coal.

The growing significance of renewable energy in China's power infrastructure makes the establishment of rules governing its pricing system crucial, according to Pierre Lau, the leader of Asian utilities and clean energy research at Citigroup, as stated in a Monday report.

NWD in Hong Kong is offering another 55 apartments for sale at State Pavilia at a reduced rate. Last week, an initial set of apartments were sold with demand exceeding the supply.

On Sunday, NWD launched the second round of apartments in its State Pavilia property located in North Point. This followed the overwhelming interest from over 2,850 potential buyers who had written cheques for an opportunity to purchase one of the 88 units that were offered at less than market value last Thursday, as per real estate agents' reports. It was expected that the developer would initiate another sale this weekend.

The updated price guide featured 11 single-bedroom properties and 44 double-bedroom apartments with sizes varying between 351 and 621 square feet. The price range for these apartments was from HK $6.32 million (equivalent to US $811,466) and could go up to HK $14.06 million, which means the cost per square foot could be anywhere from HK $17,613 to HK $22,618.

The mean cost for each square foot in the latest group is HK$18,998, a 2.5 per cent increase compared to the initial list.

The initial pricing was less than what some analysts had predicted. It was roughly 13 per cent below its housing worth, which was approximately HK$21,500, according to surveyors. The housing worth is calculated by dividing the land purchase cost by the total allowed floor area for the project.

Alibaba provides affordable access to additional DeepSeek AI models, dismisses investment gossip

Alibaba is granting customers access to six fresh DeepSeek models, simultaneously dismissing rumors of it backing the rapidly emerging start-up.

Alibaba's division for cloud computing and artificial intelligence is introducing six new DeepSeek models via its extensive language model service platform, Bailian. This information was disclosed in a WeChat message posted by Alibaba Cloud on Sunday.

Alibaba, the proprietor of the South China Morning Post, saw a 5.5 per cent increase in its stock value in Hong Kong this past Monday.

The tighter merging of Alibaba's cloud service and DeepSeek models is happening as Chinese companies and consumers are quickly embracing the open-source products of the start-up.

Alibaba is providing customers with six additional DeepSeek AI models at affordable rates, dismissing any conjecture of an investment in the rapidly growing startup.

Alibaba's division for cloud computing and artificial intelligence has announced the availability of six new DeepSeek models. This is being done through their extensive language model service platform, Bailian, as revealed in a post on WeChat by Alibaba Cloud on Sunday.

On Monday, Alibaba's stock, the company that owns the South China Morning Post, experienced a 5.5 per cent increase in Hong Kong.

The further merging of Alibaba's cloud service and DeepSeek models is happening at a time when Chinese companies and customers are quickly embracing the start-up's open-source offerings.

Alibaba is providing customers with six new DeepSeek models at affordable rates, dismissing rumors of any investment in the rapidly growing startup.

Alibaba's division for cloud computing and artificial intelligence has introduced six new DeepSeek models via its expansive language model service platform, Bailian. This information was disclosed in a WeChat message from Alibaba Cloud on Sunday.

On Monday, Alibaba, the proprietor of the South China Morning Post, saw a 5.5 per cent increase in its stock value in Hong Kong.

The increased merging of Alibaba's cloud service with DeepSeek models is happening as Chinese companies and consumers are quickly embracing the start-up's open-source offerings.

Alibaba provides additional DeepSeek AI models at affordable rates, dismisses investment gossip. Alibaba is granting customers the opportunity to use six new DeepSeek models, simultaneously dismissing rumors of possible investment in the rapidly growing start-up.

Alibaba's unit for cloud computing and artificial intelligence is introducing six new DeepSeek models via its extensive language model service platform called Bailian, as revealed in a WeChat message by Alibaba Cloud on Sunday.

On Monday, the stock value of Alibaba, the proprietor of the South China Morning Post, experienced a 5.5 per cent increase in Hong Kong.

The tighter merger between Alibaba's cloud service and DeepSeek models is happening as Chinese companies and customers are quickly embracing the start-up's open-source offerings.

Chinese government-owned automakers, Dongfeng and Changan, may merge, potentially surpassing BYD. A unified company of Dongfeng and Changan could distribute resources towards the most lucrative products and cutting-edge technologies, according to experts.

Dongfeng Motor Group, listed in Hong Kong, and Chongqing Changan Automobile, listed in Shenzhen, announced in exchange filings on Sunday that their main stakeholders are contemplating asset transactions that could result in modifications to their ownership structures. They did not provide further details.

Shares of Dongfeng Group surged by 26% to HK$4.06 on Monday, and Changan Automobile saw a 4.7% rise to 14.18 yuan.

The statements from both corporations seemingly suggest the possibility of a merger between the publicly owned parent companies, although they didn't explicitly confirm this," stated Ivan Li, a portfolio manager at Loyal Wealth Management in Shanghai. "The Chinese government may have motivations to promote amalgamation in the car industry, as intense rivalry has trapped most of the participants."

In the year 2024, a total of 5.16 million vehicles were transported by two firms, with Dongfeng handling 2.48 million and Changan accounting for 2.68 million. Meanwhile, BYD managed to sell 4.27 million electric vehicles.

If the reorganisation comes to fruition, it would significantly contribute to the unification of the industry and be highly beneficial for the long-term future of China's automobile sector, according to a study published by Morgan Stanley on Monday. The study further mentioned that a united entity would distribute resources towards brands that offer more competitive goods and technologies.

Unraveling DeepSeek: Addressing 4 pressing inquiries about China's most popular AI start-up

Does the Chinese government finance DeepSeek? What are its revenue sources? During a live webinar, SCMP editors tackle the most significant queries about the firm.

Is DeepSeek supported by the government?

There's no openly available information to indicate that the Chinese government has provided support to DeepSeek.

The independent firm initiated as a subsidiary project of High-Flyer, a quantitative hedge fund that over the years, amassed formidable computational resources for algorithmic trading. These resources were later utilized in broadening the fund's emphasis on AI, resulting in the construction of DeepSeek in 2023.

While touring their premises in a business complex in Hangzhou last month, the Post didn't observe any characteristics usually associated with a government-backed corporation, like being situated in a technology park.

As DeepSeek gains national recognition in light of heightened attempts by the US to limit China's advancement in AI, it wouldn't be difficult for the firm to obtain continued backing from the government.

DeepSeek discontinues its discount pricing due to growing demand and successfully obtains AI.com redirect. For the first time since a sudden increase in popularity last month, DeepSeek has increased the cost to access their V3 model through API.

The updated costs for DeepSeek-chat, which uses the V3 model, are now established at $0.27 for every million token inputs and $1.1 for every million token outputs. These prices indicate a notable surge compared to the former rates of $0.14 and $0.27 correspondingly. In the field of AI, a token represents a primary piece of data that algorithms manage.

It seems that DeepSeek has now garnered endorsement from the secretive proprietor of AI.com. This domain, registered in Kuala Lumpur, is recognized for directing users towards prominent AI services.

Currently, users are being redirected to chat.deepseek.com. In the past, the redirection was to OpenAI's ChatGPT and Elon Musk's X.ai when they were the hot topics in the industry.

One hour and eighteen

Trump: The impressive performance of Chinese AI startup DeepSeek is a 'reality check' for the US tech industry.