Hang Seng, the benchmark index of Hong Kong, went up on June 22 on the anticipation of eased political tensions in the metropolis. This happened post lawmakers vetoing a Beijing supported electoral reform scheme in the second week of June. Leung Chun-ying, the Chief Executive of Hang Seng, said on June 19 to lawmakers that he will embark on a number of economic initiatives and requested their support.
Leung told assembled media persons that it is time to move on and strive to forge a consensus on a number of livelihood and economic issues. Trade, however, was cautious prior to reopening of the markets in Mainland China on June 22. This will take place after a lengthy weekend. There is much anxiety among investors to determine if the dip observed on Friday will go on or if the noticeably lowered prices could bring in bargain hunters. There was a 0.4 percent rise in Hang Seng index to reach 26,878.03 points before lunchtime. China Enterprises Index, entrusted with the tracking of mainland companies listed in Hong Kong, went up to 13,259.14 points, a gain of 0.6 percent.
According to Alfred Chan of Cheer Pearl Investment, there was quiet trade due to holiday in the Chinese markets. Industrial, energy and telecom shares firmed up and materials eased. Greece played minimal role in the Hong Kong market after it made efforts to stave off debt defaults.
The stock exchange in Hong Kong has allowed the listing of the e-commerce giant Alibaba (NYSE: BABA) in its home market, thus igniting debate on the contentious dual class shareholdings. On June 19, the exchange noted that it will re-examine the present restrictions imposed on China headquartered companies to have secondary listing in the city. This move may enable groups like Baidu (NASDAQ: BIDU) and Alibaba to revert “home” through secondary offerings.
The exchange also said that responses to paper published in 2014 have encouraged it to bring in rules resembling New York. This will permit small cluster of shareholders to gain empirical control of any company and the compulsion of holding equity stakes to match voting power.
If these changes are included in the exchange for its next cluster of proposals, it will make a clear break with the rigid one share equals one vote principle, which lost Hong Kong stock exchange to play host to record creating $25 billion flotation by Alibaba.