Last July 12, the central government of China expressed its interest to improve the telecommunication industry. This paved the way for the highest close of the technology stocks in Hongkong since 2004. Tencent Holdings Ltd. increased 3.5%, Comba Telecom Systems Holding Ltd. improved around 10% and China Fiber Optic Network System Group Ltd. about 16%.
The statement, which can be viewed on the government's website, encouraged the private sector to invest in communication infrastructure as well as the upgrades to the Internet. According to Ting Lu, a Bank of America Merrill Lynch economist, the issuance of 4G licences, enhancement of third-generation wireless networks and installment of fiber connections will be rolled out by the end of 2013.
This development shed light to the optimism of investors regarding Internet stocks despite the uncertainty of macroeconomic elements in the country.
Tencent, the biggest Internet company in China, is considered the best performer in Hang Seng index due to its 29% gain this year.
Join the Conversation