Bloomberg News

Hong Kong Stocks Rise for Fifth Week, Longest Streak Since 2010

February 05, 2012

Feb. 3 (Bloomberg) -- Hong Kong stocks rose for a fifth week, the longest winning streak since 2010, with the Hang Seng Index closing at a six-month high on speculation China’s central bank may take more measures to boost economic growth.

China Minsheng Banking Corp., the nation’s first non-state lender, rose 1.4 percent. Hutchison Whampoa Ltd., owned by Hong Kong billionaire Li Ka-shing, gained 3.3 percent after it agreed to buy a mobile-phone operator in Europe. Sinopharm Group Co., China’ largest drug distributor, surged 12 percent on a plan by the mainland’s Ministry of Health to raise a subsidy for medical insurance.

“Though China’s growth is slowing, it won’t be a hard landing,” said Zhang Ling, general manager at Shanghai River Fund Management Co. “Monetary policy is starting to ease and the market’s expectations of a reserve-requirement cut are rising. Stocks are also really cheap now.”

The Hang Seng Index rose 0.1 percent, to 20,756.98 at the close. The gauge rose 1.3 percent this week, its fifth straight week of gains, as manufacturing in China, the U.S. and Europe shows signs of picking up. The Hang Seng China Enterprises Index of mainland companies listed in the city gained 0.2 percent to 11,605.57 today.

Stocks advanced today on speculation slowing economic growth will push the Chinese central bank to relax monetary policy and the government will take measures to support stocks.

Banks Rally

China Minsheng rallied 1.4 percent to HK$7.52. China Construction Bank Corp., the nation’s No. 2 lender by market value, rose 0.8 percent to HK$6.39. Agricultural Bank of China Ltd., the nation’s third-biggest lender by market value, gained 0.5 percent to HK$3.92.

Hutchison Whampoa advanced after agreeing to buy Orange Austria from France Telecom SA in a deal that values the mobile carrier at 1.3 billion euros ($1.7 billion). Hutchison rose 3.3 percent to HK$76.40.

Sinopharm rose 12 percent to HK$20.55 after a plan to raise subsidies to about 300 Chinese yuan ($48) per person in rural China this year exceeded the expected 240 yuan, CIC analyst Jessica Li said by phone today.

Wynn Macau Ltd., the Hong Kong-listed casino unit of Wynn Resorts Ltd., tumbled 4.1 percent to HK$19.94 percent after posting profit that missed estimates. Shares dropped after the casino operator posted full-year profit of $759.8 million, missing analysts’ estimates of $795.3 million.

Other gambling stocks declined. MGM China Holdings Ltd., a unit of the largest operator on the Las Vegas Strip, dropped 1 percent to HK$11.76. SJM Holdings Ltd., Asia’s biggest casino, slipped 1 to HK$14.42 percent.

Futures on the Hang Seng Index retreated 0.1 percent to 20,751 today. The HSI Volatility Index dropped 3.9 percent to 21.77 today, indicating traders expect a swing of 6.2 percent on the benchmark over the next 30 days.

--With assistance from Jonathan Burgos in Singapore. Editors: Jason Clenfield, Jim Powell

To contact the reporter on this story: Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net


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