The surge in locally-listed stocks and the prospect of additional Chinese firms listing in the city had sent the stock price of Hong Kong's exchange operator to new heights on Tuesday. The latest surge in its stock prices has made the Hong Kong Exchanges and Clearing (HKEX) the world's largest exchange operator in terms of market capitalization.
The increased confidence in HKEX's ability to bring in more companies comes after Alibaba Group's online payments arm, Ant Group, announced plans of listing in the city and in Shanghai via simultaneous initial public offerings (IPOs). Ant Group, which operates Alibaba's Alipay platform, is reportedly still discussing the size and timing of the dual share sale. The IPOs are expected to be one of the largest of its kind this year given Ant Group's estimated market capitalization of more than $200 billion.
On Tuesday, HKEX's stock price surged by 9.8 percent, its biggest gain in over five years. Trading volumes of the particular stock surged 63 percent above its 20-day average. At the end of the trading day, the stock closed at a record high of HK$380 per share. Since the start of the year, HKEX's stock price has increased by more than 50 percent. The record-high value of its stock price brings the exchange operator's market capitalization to more than $62 billion.
The increase in HKEX's stock price follows a global upward trend this week. In mainland China, the Shanghai Composite Index rose by 0.2 percent on Tuesday, extending its 3.1 percent gain in the previous day. Alibaba Group's shares had jumped by 7.3 percent, ending the day at HK$257 per share. Tencent Holdings' share prices had also rallied by 7.9 percent, closing at HK$564 per share. Other major gainers in China included Meituan Dianping and JD.com.
In the U.S., the NASDAQ surged upwards thanks to strong performances by tech stocks such as Zoom Technologies and Amazon. European stocks also trended upwards amid news of a new stimulus package that is estimated to be worth as much as $858 billion.
The continued positive outlook in the global capital markets was partly fueled by the progress in the development of an effective vaccine for the coronavirus. A candidate vaccine developed by the University of Oxford and AstraZeneca Plc had yielded promising results. Another candidate being developed by China's CanSino Biologics Inc., Pfizer Inc., BioNTech SE had also shown promising trial results. Analysts at AxiCorp had noted that fears of the continued negative effects of the pandemic have so far subsided, which has resulted in an economic upward trend.
