This Friday, most Asian markets performed better after China released the latest economic data. One of the best performers was Hong Kong's Hang Seng Index (HSI) which increased in value as trading resumed after the holidays. Moreover, China's industrial profits also gained momentum compared to November's yield.
A recent report claimed that China and other Asian markets performed better this Friday. First, Hong Kong's HSI improved by 1.2 percent when trading resumed a day after Christmas. The Shanghai Composite (SHCOMP) also improved by 0.5 percent including South Korea's Kospi that yielded a 0.2 percent increase and Japan's Nikkei 225 which was the only stock stagnant in the market today.
It was also reported that China's industrial profits gained a 5.4 percent increase from November 2018 which was a turnabout from its initial 9.9 percent drop last October of 2019. Industrial companies in China increased their production last month which caused better performance for this morning. It was later revealed that last November, China's government announced through a press release that despite the ongoing pressure within the country's economy, increasing industrial production of goods may alleviate the volatility of its corporate profitability.
Another improving Asian stock was the Hong Kong-based life insurance company AIA which increased by 1.8 percent this Friday. The company revealed that it is incorporating plans that would enable them to take advantage of the changes that China imposed in its financial sector.
Last Thursday, AIA announced that it would convert its Shanghai office into a wholly-owned subsidiary in China. Before, the company claimed that they could not make the move. However, since China had announced that it would waive foreign ownership limits on its financial sector this coming 2020, this would allow AIA to wholly own its subsidiary in Shanghai. It was also announced that China would extend the same leniency in other industries by 2020.
At present, AIA claimed that they can only operate in restricted areas approved by Chinese operators. The same is applicable to their Shanghai and Beijing offices. However, once they can have a wholly-owned subsidiary in mainland China, they can freely expand their business and grow its client base.
According to Reuters, China currently implements a strategy wherein financial experts would be placed in provinces to manage risks and rebuild their regional economies. It was reported that these were measures taken by the country to aid its local governments to take the lead in managing their financial risks and cutting the costs of the local intervention. The leniency, the report claimed, would push more foreign businesses to aid in the betterment of China's economy and, at the same time, improve their profitability.
