There is a new shift in the Chinese technology stocks. Reports show the stocks rallying to a level there have never been to in over a month. Several explanations coming to the limelight tell more about the latest trend, and the improvement in investor sentiment is something that no one can rule out of the recent progression.
Tencent Holdings bought back its shares in the public market, something that went on every day since it pronounced its second-quarter results. It was on Aug. 18 that the company made the announcement, eventually spurring investor sentiment.
The Hang Seng Tech Index stood at a new level on Tuesday, and that was by almost 2.3%. Analysts say they haven’t witnessed such a change since July. They commend the rise from an extreme low to about 18%. The analysts also recognized the significant contributors for the role they played to facilitate the remarkable shift. Some of the companies included Alibaba Group Holding Ltd – ADR (NYSE: BABA), Meituan, and Tencent.
Tencent continues to appeal to traders to enter the market, and that is something it has been doing since the start of the week. It considers buying back shares valued at HK$100.5 million ($12.9 million) an excellent incentive for the shareholders that need to buy shares.
Analysts also attribute the impressive shift to the minimal bad news about regulation. They say that the company’s decision to buy back shares spurred the remarkable shift in investor confidence and trust.
An Intelligence analyst known as Matthew Kanterman opines, “The lack of more bad news about regulation and company share buybacks in recent days could support an ongoing shift in investor sentiment towards a more constructive stance on Chinese technology stocks.”
The technology leader bought back 2.2 million shares, and it outlines that the rate of HK$464 per share is quite ideal.