Bloomberg News

Hong Kong Stocks Rise on U.S. Growth; China Construction Gains

March 01, 2010

Hong Kong stocks advanced, led by banks, after China Construction Bank (939) Corp. said it doesn’t have to raise funds, U.S. economic growth topped analyst estimates and oil and copper prices gained.

China Construction Bank, the country’s second-largest lender, jumped 4.1 percent after Chairman Guo Shuqing said it doesn’t have plans to raise funds this year. Jiangxi Copper Co. (358), China’s biggest producer of the metal, jumped 5.8 percent as copper prices rose to a five-week high after an earthquake in Chile forced some mines to close. Li & Fung Ltd. (494), which gets 61 percent of its sales from the U.S., rose 3.3 percent. Cheung Kong (Holdings) Ltd. (1), the city’s second-biggest developer, gained 2.4 percent.

“The data released so far have been quite positive, including the U.S. GDP figures,” said Steven Leung, dealing director at UOB-Kay Hian Ltd. in Hong Kong. “The market for this week should be quite steady but the focus will be on whether the Chinese government wants to do further tightening.”

The Hang Seng Index (HSI) gained 2.2 percent to close at 21,056.93, the highest close since Jan. 22. Shares on the gauge are priced at an average 13.6 times estimated earnings, down from 18.1 times on Nov. 16, when the index closed at its highest level for 2009, according to Bloomberg data.

The Hang Seng China Enterprises Index (HSCEI), which tracks the so- called H shares of Hong Kong-listed Chinese companies, climbed 3.2 percent to 11,913.45.

Construction Bank

China Construction Bank jumped 4.1 percent to HK$6.11. Bank Chairman Guo said that the bank hadn’t been told by the regulator to raise its capital adequacy ratio to 11.5 percent and doesn’t have plans to raise funds this year.

“Late last week it was said that the People’s Bank of China is setting the minimum capital ratio at 11.5 percent, which is less than the rumored 13 percent, so people are relieved,” said Leung.

Industrial & Commercial Bank of China (601398) Ltd., the nation’s biggest listed bank, rose 5.1 percent to HK$5.77. Bank of China Ltd., the No.3 bank, advanced 4 percent to HK$3.92.

HSBC Holdings Plc., Europe’s biggest bank, climbed 0.9 percent to HK$86.65. Hang Seng Bank Ltd. (11), the city’s largest local lender by market value, rose 1.2 percent to HK$114.90. Both banks are reporting earnings after the market close today.

Jiangxi Copper increased 5.8 percent to HK$16.70, the most since Jan. 5. Copper rose the most in 11 months in after-hours trading in New York after a magnitude 8.8 earthquake halted mines in Chile, cutting supplies from the world’s largest producer.

PetroChina, Aluminum Corp.

PetroChina Co., the nation’s biggest oil company, advanced 2.1 percent to HK$8.85 after oil rose for a second day. China Petroleum & Chemical Corp. (386), Asia’s biggest refiner, gained 1 percent to HK$6.15.

Aluminum Corporation of China Ltd., also known as Chalco, increased 3.6 percent to HK$7.78. The company had its Hong Kong- listed shares rated “buy” in new coverage at BNP Paribas, which said a reduction in prices of the metal offers a “good re-entry opportunity” given the outlook for the industry.

Li & Fung, the world’s largest supplier of toys, clothes and furniture to retailers, rose 3.3 percent to HK$37.30. Foxconn International Holdings Ltd. (2038), the world’s biggest contract maker of mobile-phones, climbed 0.6 percent to HK$8.01. The company gets 31 percent of its revenue from America.

The U.S. economy expanded at a 5.9 percent annual rate in the fourth quarter, more than the government estimated in January, reflecting stronger business investment and companies rebuilding inventories.

Cheung Kong

Cheung Kong (Holdings) Ltd. gained 2.4 percent to HK$96.95. The developer controlled by billionaire Li Ka-shing said it will offer three new projects this month and will put 47 special units at its Celestial Heights development back on the market after those deals collapsed.

Sun Hung Kai Properties Ltd. (16), the world’s biggest developer by market value, rose 1.7 percent to HK$109.60. China Overseas Land & Investment Ltd. (688), a developer owned by the country’s construction ministry, advanced 4.6 percent to HK$16.46.

Futures on the Hang Seng Index rose 2.2 percent to 20,983. Just one stock on the 42-member Hang Seng Index fell.

To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net; Emily Chan in Hong Kong at Echan107@bloomberg.net

To contact the editor responsible for this story: Nicolas Johnson in Tokyo at nicojohnson@bloomberg.net.


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