Hong Kong stocks up 3% as tech stocks rise; China’s activity data

Shares of large Chinese tech companies are currently “just so depressed” and “dirt cheap,” said Fred Hu, founder and chairman of Primavera Capital.

The Hang Seng Tech index in Hong Kong is down more than 30% from the start of the year, though the index has bounced in recent weeks.

The Chinese government’s relentless crackdowns and zero-Covid policy has dampened the confidence of tech entrepreneurs and investors, but there is “tremendous deep value” in some tech stocks, Hu said.

“China is a nation that any other successful nation would need [for] technology and innovation … I think there’s an upside” for many such stocks, he added.

— Charmaine Jacob

Hong Kong-listed shares of Chinese technology companies rose significantly in the first hour of trade.

Tencent rose 7.6%, Meituan gained 5.9%, and Alibaba rose 9%. The Hang Seng Tech index was up around 4%.

The moves come despite disappointing activity and retail sales data from China, and following U.S. President Joe Biden and Chinese President Xi Jinping’s meeting ahead of the G-20 summit in Bali.

Private investment firm Safanad’s chief strategist said the discussion between the two leaders went “much better” than expected, though he mostly credited that to low expectations.

Shares of Taiwan Semiconductor Manufacturing Company listed in Taiwan jumped after Berkshire Hathaway disclosed a $4 billion stake in the company.

The stock soared as much as 9.44%, reaching the highest levels in nearly two months.

Berkshire added more than 60 million shares of the Taiwanese chipmaker’s American depositary receipts, worth $4.1 billion (1.2% of TSM) by the end of the third quarter, making Taiwan Semi the conglomerate’s 10th biggest holding at the end of September.

The stock was last up around 8%.

China’s industrial production grew 5% in the month of October compared with a year ago, slowing from an increase of 6.3% seen in September. The latest figure misses estimates of a 5.2% rise predicted in a Reuters poll.

Separately, retail sales in China fell 0.5% in October from a year ago, missing expectations.

Analysts polled by Reuters expected a 1% increase, and retail sales grew 2.5% in September.

— Abigail Ng

With many stocks in a bear market, equities could be undervalued by 15%, according to Morningstar.

The equity research firm’s chief U.S. strategist believes headwinds that were present earlier in the year will start to recede at the start of next year and benefit stocks.

Dave Sekera also shared his “fair value” assessment on six companies with a “wide economic moat” that will outperform in such an economic environment.

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