Chinese tech stocks surge after Xi backs blockchain
By Bloomberg | 29 Oct 2019 at 19:46hrs
Chinese investors snapped up every blockchain-related stock in sight after President Xi Jinping said Beijing wants to speed up development of the technology.
The gains were widespread Monday, with Zhejiang Huamei Holding Co Ltd. and Julong Co Ltd. among at least dozens of stocks surging by the daily 10% limit onshore. The excitement coincided with a 30% rally in Bitcoin, and also boosted stocks with more tenuous connections to blockchain, like baby-food producer Beingmate Co. and selfie-app developer Meitu Inc.
Xi said China will increase investment in blockchain technology after chairing a study session last week on developing the industry, state-owned Xinhua reported late Friday. The market reaction shows how far an endorsement from Xi can go in China, where high-level officials on Monday began their first major policy meeting since early 2018.
"Most of these companies, especially those that are just beginning to state their connection with blockchain today, are trying to take advantage of the hype," said Li Shiyu, fund manager at Guangdong Xiaoyu Investment Management Co. "It shows how much excitement can be triggered by something stressed as a priority by the top man himself."
The Shenzhen Information Technology Index jumped 5.3% Monday, its biggest advance in almost eight months. American depositary receipts of Chinese blockchain companies also surged Friday.
Investors are adding pressure on other firms to jump on the blockchain hype, using an online Q&A platform to submit hundreds of questions on their plans to use the technology.