Hong Kong Shares Surge to 18-Month High Following China's New Policies to Boost Economy

Hong Kong stocks rallied on Tuesday, the highest in 18 months, following China's new policies to boost the economy and the equity market.

The policies included new financing facilities worth 800 billion yuan for buying shares and reduce borrowing costs and mortgage rates to boost the economy.

The Hang Seng Index soared 4.13%, or 753.45 points, to close Tuesday's session at 19,000.56. The Hang Seng China Enterprises Index rose by 5.09%, or 325.39 points, to close at 6,714.47.

China announced several strengthening policies on Tuesday to boost its economy, including mortgage rate cuts for existing housing, property measures, and its reverse requirement ratio among others. The policymakers also plan to introduce new tools to support the stock market.

China's central bank injected 74.5 billion yuan in 14-day reverse repo operations on Monday at a lower interest rate of 1.85%, according to a same-day notice. The People's Bank of China also infused 160.1 billion yuan in seven-day reverse repo operations with a 1.7% rate, it said.

People's Bank of China chief Pan Gongsheng indicated that the central bank would cut rates and reserve requirement ratios for banks to bolster growth. The PBOC will trim the interest rate on seven-day reverse repos to 1.5% from 1.7%. It also indicated that it would cut the RRR for banks by 0.5 percentage points.

In corporate news, Zhejiang Taimei Medical Technology, a cloud-based software-as-a-service company for medical companies, submitted documents for an initial public offering in Hong Kong, according to documents submitted to the Hong Kong Stock Exchange.

Furthermore, Crypto venture investor Animoca Brands is eyeing Hong Kong as a leading site for its possible initial public offering, Bloomberg News reported, citing Chairman Yat Siu. The city's crypto activity has expanded as the government plans to make Hong Kong a digital asset hub, the report said.

In further corporate news, Kingkey Financial International (Holdings) (HKG:1468) has completed the placing of 183,119,113 shares to at least six investors at HK$0.41 apiece, raising net proceeds of HK$74.1 million. Shares of the firm were up over 8% on Tuesday's close.

Shougang Fushan Resources Group (HKG:0639) is looking to raise up to HK$427 million through a one-for-thirty rights share issue. Shares of the firm were up over 6% on Tuesday's close.