China Communications Construction (+6.57%) led the continued rally on the Hang Sang China Enterprise Index overnight, with banks and energy companies following closely. China Communications Construction is an infrastructure play, like another star performer, China Railway Construction (1186 HK), whicih closed at HK 12.86, up from HK 7.00 in October. Investors evidently buy into the “One Belt, One Road” plan embodied in the new Asia Infrastructure Investment Bank. China envisions hundreds of billions of dollars worth of railways, highways, pipelines and broadband installations across Asia leading trillions of dollars worth of additional trade. The two most visible infrastructure plays (China Southern Railroad remains suspended pending a merger) on the Hong Kong market are up 30% over the past week. Last year’s favorites like insurance companies are up slightly but lagging as investors shift away from safer instruments.
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Categories: Asia Unhedged