Hong Kong stocks rose, with the Hang Seng Index heading for its first gain in five days, as U.S. manufacturing data beat expectations and a gauge of China service industries improved.
Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, increased 2 percent. Li & Fung Ltd. (494), a supplier of toys and clothes to Wal-Mart Stores Inc., climbed 3 percent. Sun Hung Kai (16) Properties Ltd. advanced 2 percent as the world’s second-largest real estate company announced a media briefing after their co-chairmen were arrested last week by Hong Kong’s anti-corruption agency.
“In a broad sense the world is pretty OK,” Mikio Kumada, Singapore-based global strategist at LGT Capital Management, said in a Bloomberg Television interview. “The U.S. economy is improving, Europe is stabilizing and China may avoid a hard landing.”
The Hang Seng Index (HSI) added 1.3 percent to 20,790.98 as of the 4 p.m. close in Hong Kong, with almost four shares rising for each that fell. Volume on the gauge was about 13 percent lower than the 30-day average, according to data compiled by Bloomberg. The benchmark index declined 3.6 percent in the two weeks through March 30 as companies including Aluminum Corp. of China Ltd. missed earnings estimates.
The Hang Seng China Enterprises Index of mainland companies increased 1.9 percent to 10,859.49 today. Shares rose after a survey showed China’s service industry expanded in March on new orders at retail, information technology and software businesses.
Chinese banks and developers advanced as central bank Governor Zhou Xiaochuan said policy makers will use interest rates and other measures to gradually reduce inflation and achieve a soft landing for the world’s second-largest economy.
ICBC, as China’s No. 1 lender is known, gained 2 percent to HK$5.11. Agricultural Bank of China Ltd. (601288), the nation’s third- biggest lender, rose 2.4 percent to HK$3.42.
China Overseas Land & Investment Ltd. (688), the largest mainland developer listed in Hong Kong, increased 5.3 percent to HK$15.84. Shimao Property Holdings Ltd. (813), controlled by billionaire Hui Wingmau, jumped 7.7 percent to HK$8.82.
Futures on the Standard & Poor’s 500 Index slid 0.1 percent today. The gauge gained 0.8 percent in New York yesterday after U.S. manufacturing expanded at a faster pace than forecast in March, a sign that industry is weathering slower global growth.
Exporters and shipping companies advanced. Li & Fung rose 3 percent to HK$17.94. Man Wah Holdings Ltd., the sofa maker that counts the U.S. as its biggest market, gained 3.5 percent to HK$4.75. China Shipping Container Lines Co., which gets 36 percent revenue from Trans-Pacific routes, increased 2.9 percent to HK$2.80. China Cosco Holdings Co. (1919), Asia’s biggest container carrier, advanced 4.1 percent to HK$5.10.
Kwok Denies Wrongdoing
Sun Hung Kai, whose shares tumbled 13 percent on March 30 after co-chairmen Thomas and Raymond Kwok were arrested by the Independent Commission Against Corruption, gained 2 percent to HK$96.25. In a brief media conference just after the Hong Kong market closed, Raymond Kwok denied any wrongdoing. His brother, Thomas, said the company operates usual and that its projects won’t be affected by ongoing investigations.
Among stocks that declined, Kunlun Energy Co., a gas supplier controlled by PetroChina Co., sank 3.1 percent to HK$13.74. The company plans to raise HK$10.8 billion ($1.4 billion) by selling 800 million shares at HK$13 to HK$13.50 each, a discount of as much as 8.3 percent to its closing price yesterday, according to a term sheet obtained by Bloomberg News.
NagaCorp Ltd. (3918), operator of a casino in Cambodia, slumped 15 percent to HK$3.06 as Fourth Star Finance Corp. sought to raise as much as HK$680.52 million by selling shares in the company. The stock is being offered for HK$3.04 to HK$3.18 per share, according to a term sheet obtained by Bloomberg.
The Hang Seng Index climbed 12 percent in the first quarter as signs the U.S. economy is recovering fueled confidence in exporters. The rally boosted the value of stocks on the gauge to 10.2 times estimated earnings as of yesterday. That compares with 13.6 times for the Standard & Poor’s 500 Index and 11.1 times for the Stoxx Europe 600 Index.
Futures on the Hang Seng Index expiring this month added 1.6 percent to 20,778. The HSI Volatility Index (VHSI) slipped 7.9 percent to 18.53, the lowest since July 22, indicating options traders expect a swing of about 5.3 percent in the benchmark index over the next 30 days.
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