Hong Kong stocks climbed, with the Hang Seng Index (HSI) capping its highest close since 2011, as U.S. and Chinese data signaled improvement in the world’s two largest economies. Shares briefly pared gains after China’s exports rose less than analysts estimated.
Cnooc Ltd. (883), a state-owned Chinese offshore energy explorer, gained 1.1 percent after Canada approved its $15.1 billion takeover of Nexen Inc. (NXY) Intime Department Store Group Co. (1833), a department store operator that gets all its revenue from China, jumped 7.6 percent after the nation’s retail sales rose. Yue Yuen Industrial Holdings Ltd., which makes shoes for Nike Inc., climbed 1.7 percent.
The Hang Seng Index advanced 0.4 percent to 22,276.72, its highest close since August 2011. About three stocks rose for every two that fell on the gauge, which expanded to 50 companies today with the inclusion of Kunlun Energy Co. (135) Trading volume was about 5.3 percent below the 30-day average for the time of day, according to data compiled by Bloomberg. The Hang Seng China Enterprises Index of mainland companies climbed 0.7 percent to 10,993.90.
“There is huge amount of money coming to Hong Kong,” said Michael Liang, chief investment officer at Foundation Asset Management (HK) Ltd., which manages $120 million. “The nature of hot money is that they come in quick and they can also leave very quickly. We will have some clearer picture around Chinese New Year whether the hot money will stay longer or not. Economic data looks better, which is helping the sentiment, but it’s more valuations” that’s driving the market.
About $7 billion of funds flowed into Hong Kong since the U.S. Federal Reserve embarked in September on a third round of quantitative easing, Norman Chan, the chief executive officer of the Hong Kong Monetary Authority, told reporters in Hong Kong today. The HKMA intervened twice last week to defend the Hong Kong currency’s peg to the U.S. dollar, the 10th time since the Fed’s program began.
Hong Kong’s benchmark index rose for the 11th week in 14 last week as central banks in China, the U.S., Europe and Japan added to stimulus measures. The gauge traded at 11.6 times average estimated earnings, compared with 13.6 for the Standard & Poor’s 500 Index and 12.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
An exchange-traded fund tracking the FTSE China A50 Index of China’s 50 largest domestically listed companies gained 7 percent from Nov. 15, when China’s new leadership was announced. The FTSE A50 rose 5.5 percent and the Shanghai Composite Index of shares listed in China’s biggest local share market, added 2.6 percent over that span.
Cnooc rose 1.1 percent to HK$16.78 today after Canadian Prime Minister Stephen Harper approved the largest-ever foreign acquisition by a Chinese company. The Nexen deal gives the explorer a stake in Canada’s largest oil-sands project and the biggest position in the Buzzard oil field in the U.K. North Sea.
China’s industrial production climbed 10.1 percent in November from a year earlier and retail sales growth accelerated to 14.9 percent, while inflation was 2 percent, the statistics bureau said yesterday. Shares briefly pared gains after the customs data today showed exports expanded a lower-than- estimated 2.9 percent in November from a year earlier.
Intime Department Store Group jumped 7.6 percent to HK$9.64, while Parkson Retail Group Ltd. increased 5.1 percent to HK$5.95.
Futures on the S&P 500 declined 0.1 percent today. The S&P 500 rose 0.3 percent on Dec. 7 after Labor Department figures showed employment climbed more than forecast in November while the jobless rate unexpectedly fell.
Yue Yuen increased 1.7 percent to HK$26.40. Li & Fung Ltd. (494), a supplier of toys and clothes to Wal-Mart Stores Inc., rose 1.1 percent to HK$13.10.
Italian Prime Minister Mario Monti said he intends to resign, renewing concern nations in the euro bloc are grappling with a deepening debt crisis. This comes ahead of a Dec. 13-14 summit of European Union leaders to debate a road map for the overhaul of the 17-nation region.
“We could see a more sustained recovery in equity markets as China’s economy shows signs of gradual recovery,” said Yoji Takeda, who oversees about $1.2 billion as Hong Kong-based head of Asian equities at RBC Investment Management (Asia) Ltd. “There’s underlying uncertainties in Europe amid political maneuvering in Italy ahead of elections.”
Futures on the Hang Seng Index dropped 0.1 percent to 22,257. The HSI Volatility Index (VHSI) declined 1.1 percent to 15.67, indicating traders expect a swing of 4.5 percent for the equity benchmark in the next 30 days.
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