(Bloomberg) -- Shares of Chinese data security companies surged on speculation a botched software update by CrowdStrike Holdings Inc. may boost demand for domestic alternatives.
Shenzhen GuoHua Network Security Technology Co. jumped by the 10% daily limit in Shenzhen on Monday, while Hunan Kylinsec Technology Co. soared 17% before paring the advance. Shares of 360 Security Technology Inc. climbed as much as 5.9%. In contrast, major onshore benchmarks fell following a disappointing Third Plenum outcome.
The rally in a clutch of Chinese data firms came after a global IT meltdown last week, when a faulty software update affected millions of devices. The gains, however, may prove fleeting as Chinese firms lack the technology of larger global peers, with many market watchers seeing the day’s move as speculative trading amid a dearth of catalysts.
“There is still a significant gap for Chinese data securities companies in terms of technology and research and development capacities” to catch up with global leading firms, said Shen Meng, a director at Beijing-based investment bank Chanson & Co. “These companies are keeping competitiveness in the domestic market due to policy support.”
The CSI 300 Index fell Monday even as the People’s Bank of China cut a key short-term policy rate for the first time in almost a year, and lenders lowered their benchmark lending rates. The Third Plenum concluded last week with little upside momentum for stock traders, suggesting the market may continue to languish over the short term.
©2024 Bloomberg L.P.
