Xi Jinping's comments spark rush for blockchain-related stocks

Chinese President Xi Jinping said China will increase investment in blockchain technology after chairing a study session last week on developing the industry.
Chinese President Xi Jinping said China will increase investment in blockchain technology after chairing a study session last week on developing the industry.PHOTO: REUTERS

BEIJING • Investors in China have snapped up every blockchain-related stock in sight after President Xi Jinping said the government wants to speed up development of the technology.

The gains were widespread yesterday, with Insigma Technology and Sinodata among more than 60 tech shares surging by the daily limit in Shanghai and Shenzhen.

The excitement coincided with a 26 per cent rally in bitcoin, and also boosted stocks with more tenuous connections to blockchain, like baby-food producer Beingmate and selfie-app developer Meitu.

Mr Xi said China will increase investment in blockchain technology after chairing a study session last week on developing the industry, Xinhua reported last Friday.

The market reaction showed how far an endorsement from Mr Xi can go in China, where top officials yesterday began their first major policy meeting since early last year.

Guangdong Xiaoyu Investment Management's fund manager Li Shiyu said: "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.

"It shows how much excitement can be triggered by something stressed as a priority by the top man himself."

The Shenzhen Information Technology Index closed 5.3 per cent higher yesterday, its biggest advance in eight months.

 
 

Hundsun Technologies, YGSOFT, Easysight Supply Chain Management and many more companies with officially registered blockchain businesses rose by the 10 per cent limit.

In Hong Kong, traders singled out Meitu due to its plans for an encrypted user-identification system. The shares surged as much as 30 per cent. Pantronics Holdings - which earlier this month said it will change its name to Huobi Technology, a reference to a digital currency exchange - rallied as much as 67 per cent.

American depositary receipts of Chinese blockchain companies also surged last Friday. Investors pressured other firms to jump on the blockchain hype, using an online platform to submit thousands of questions on their plans to use the technology.

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A version of this article appeared in the print edition of The Straits Times on October 29, 2019, with the headline 'Xi's comments spark rush for blockchain-related stocks'. Print Edition | Subscribe