Bloomberg News

Hong Kong Stocks Swings as China Shipping Gains on Profit

January 21, 2013

Most Hong Kong stocks rose, with the city’s benchmark index trading near a 19-month high, as China Shipping Container Lines Co. gained after saying it will return to profit, while ZTE Corp. (000063) fell.

China Shipping climbed 3.9 percent. China Vanke Property (Overseas) Ltd. surged as much as 19 percent after its parent said it would move trading of its foreign-currency denominated shares to Hong Kong. ZTE dropped 1.4 percent after the maker of mobile-phone equipment forecast a loss on delays in network projects.

About three stocks rose for every two that fell on the Hang Seng Composite Index, which advanced 0.2 percent at the close in Hong Kong. The Hang Seng China Enterprises Index (HSCEI) of mainland companies gained 0.2 percent to 12,125.89. The benchmark Hang Seng Index (HSI) fell less than 0.1 percent to 23,590.91, with volume about 31 percent below the 30-day average.

“The market doesn’t move in a straight line,” said Tim Leung, a Hong Kong-based portfolio manager who helps oversee about $1.5 billion at IG Investment Ltd. “This is a consolidation after a sharp rally. A lot of people want to lock in profit.”

Hong Kong’s benchmark index closed on Jan. 18 at the highest level since June 2011 after a report showed China’s economic growth accelerated for the first time in two years. Shares on the measure traded at 11.5 times estimated earnings, compared with 13.4 for the Standard & Poor’s 500 Index and 12.1 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

China Shipping

China Shipping advanced 3.9 percent to HK$2.68 after the company posted preliminary full-year net income of 520 million yuan ($83.6 million), compared with a loss of 2.74 yuan a year earlier.

China Vanke Property surged 13 percent to HK$16.98. Shares advanced after parent China Vanke Co. Ltd. announced a plan to move trading of its foreign-currency denominated shares to Hong Kong to reach more investors. The unit of the mainland’s biggest developer by market value today changed its name from Winsor Property Holdings.

ZTE dropped 1.4 percent to HK$14.56 after saying it may report a fiscal-year net loss of as much as 2.9 billion yuan. The company may swing to a profit in the first three months of 2013, it said in a statement, without giving a target.

Gome Electrical Appliances Holding Ltd. fell 3 percent to 96 Hong Kong cents after confirming a report it is closing stores in the city.

The Hang Seng Volatility Index (VHSI) advanced 0.3 percent to 14.10, indicating options traders expect a swing of 4 percent in the next 30 days. Futures on the Hang Seng Index gained less than 0.1 percent to 23,591.

To contact the reporter on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net

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


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