(Bloomberg)-A potential encounter this week between President Xi Jinping and e-commerce icon Jack Ma, who after a sizzling run through Tech shares, could be the next catalyst to extend the rally in the shares of China.
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Prominent entrepreneurs, including Ma, have been invited to meet the best leaders of the nation, people who are familiar with the case that were said last week. The potential show of support for the private sector coincides with the recent increase in shares in Hong Kong, driven by growing possibilities in artificial intelligence.
The Hang Seng China Enterprises Index rose by 4.1% on Friday to its highest since February 2022, with an Oktoberpiek encouraged by a Stimulusblitz. A tech meter in Hong Kong entered a bull market earlier this month, fed by the Chinese startup Deepseek’s AI model that is praised as a game changer.
“Such a controversial approval sends a clear message of support from the Chinese government, which regards the technology sector as a future motorcycle for economic growth,” said Bloomberg Instichter analyst Robert Lea.
An important director of the Rally is Alibaba Group Holding Ltd., whose shares in the Hong Kong-Lekenterde have won 6.3% on Friday, which contributes to an increase of almost 60% since January 13. The company is planned to report income on Thursday. The option market prices in a relocation of 7.6% in the Alibaba shares after the results, compared to an average 4.8% after the last eight quarterly reports.
Some investors say that the rally is overcrowded and stretched, but the support of XI would be a boost of trust for the stock markets of $ 16 trillion Chinese and Hong Kong who have made steady wins since mid -January.
“The recent developments correspond to our expectations of a short -term trade option on the Chinese stock market, instead of indicating a structural shift,” said Nenad Dinic, a stock strategist at Bank Julius Baer in Zurich. “Nevertheless, without new catalysts of income, liquidity flows or policy signals, the risk of a withdrawal increases.”
A meeting with XI and MA can be a crucial turning point for Alibaba since Beijing the first public offer of the Ant Group Co. At the 11th hour nail, which would have been the largest IPO in the world, and the start of a regulatory campaign for work marked the sector in which might have become too large and powerful for comfort. It would also send a powerful signal that the Chinese Communist Party takes a more supportive attitude towards companies in the private sector.
