Bloomberg News

Hong Kong Stocks Rise on Greek Debt Deal, Slower China Inflation

March 09, 2012

Hong Kong stocks rose for a second day, with the Hang Seng Index paring a weekly loss, as Greece completed the biggest sovereign-debt restructuring in history and China’s inflation slowed.

Hutchison Whampoa Ltd. (13), the owner of ports in Spain and Germany, added 1.6 percent. Agricultural Bank of China Ltd., the nation’s third-biggest lender by market value, gained 1.4 percent. Jiangxi Copper Co., China’s No. 1 producer of the metal, climbed 1.3 percent as copper futures rose. Zoomlion Heavy Industry Science and Technology Co. jumped 5.4 percent after HSBC Holdings Plc recommended investors buy shares of the construction equipment maker.

“The European debt crisis is less of a concern now,” said Michiya Tomita, a Hong Kong-based fund manager at Mitsubishi UFJ Asset Management Co., which oversees $65 billion. “If growth in China shows further weakness, there could be further loosening of monetary policy. That should support equities.”

The Hang Seng Index (HSI) rose 0.8 percent to 21,064.30 as of 2:19 p.m. in Hong Kong, paring this week’s decline to 2.1 percent. The gauge has advanced 86 percent since March 2009, the bottom of a global equities slump that followed the collapse of Lehman Brothers Holding Inc., as central banks from China to the U.S. eased monetary policy.

The Hang Seng China Enterprises Index of mainland companies, also known as the H-share Index, gained 0.6 percent to 11,235.51 today.

Mainland lenders and developers advanced as China’s inflation eased more than forecast to the slowest pace in 20 months, giving policy makers more room to stimulate the world’s second-biggest economy as investment and export growth weaken.

Room To Ease?

China’s home sales declined, while industrial production and retail sales grew less than economists estimated in the first two months of the year, government data showed. Signs the economy is slowing may allow authorities to cut bank reserve ratios by the middle of this month, according to Ding Shuang, senior China economist at Citigroup Inc. in Hong Kong, who spoke before the reports.

Companies that do business in Europe advanced after Greece completed a deal with creditors today, with 95.7 percent of private investors agreeing to participate in the debt swap agreement.

The Hang Seng Index rose 13 percent this year through yesterday, boosting the price of shares on the gauge to 10.6 times estimated earnings. That compares with 13 times for the Standard & Poor’s 500 Index and 10.8 times for the Stoxx Europe 600 Index.

Futures on the Hang Seng expiring this month added 1 percent to 21,035. The HSI Volatility Index dropped 4.4 percent to 21.55, indicating options traders expect a swing of 6.2 percent in the benchmark index over the next 30 days.

To contact the reporter on this story: Jonathan Burgos in Singapore at

To contact the editor responsible for this story: John McCluskey at

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