By Anniek Bao
A host of travel and tourism-related stocks rose in Hong Kong trade Thursday after a report that Beijing is looking at ways to move on from its zero-tolerance approach to managing Covid-19.
Shares of Chinese online travel giant Trip.com Group Ltd. gained 11%, trimming losses since its June high to 31%. China Eastern Airlines Corp. and China Southern Airlines Co. each added 5.8%, while luggage maker Samsonite International SA rose 4.9%.
Shares of hotels manager Huazhu Group Ltd. rose 7.5%, while Fosun Tourism Group, which operates resorts and manages tourism facilities in China, added 8.2%. Hotel reservation and flight booking company Tongcheng Travel Holdings Ltd. gained 7.3%.
The rally came a day after The Wall Street Journal reported that China is actively exploring ways to loosen Covid-19 controls, including considering the possible use of travel bubbles modeled on measures taken during the Winter Olympics. Beijing has employed an effective but laborious combination of digital surveillance, tight border controls, mass testing and targeted lockdowns to prevent and suppress larger outbreaks since the outbreak of Covid-19 in early 2020.
The rally was mainly due to market chatter "that China is considering abandoning [its] zero-Covid policy," said Julia Yao, a Shanghai-based analyst at UOB Kay Hian Investment Consulting Co.
Experiential opening measures as soon as this summer "may provide some optimism towards further reopening, at a time where accommodative policies from authorities continue to be in place to support growth," brokerage IG said in a research note. That could yield "a worst-could-be-over kind of situation."
The gains helped push the Hang Seng Index 0.6% higher, offsetting a decline in tech stocks. The index is still down more than 20% over the past 12 months.
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(END) Dow Jones Newswires