Bloomberg News

Hong Kong Stocks Head for 19-Month High; Minsheng Gains

January 22, 2013

Hong Kong stocks rose, lifting the city’s benchmark index to a 19-month high as China Merchants Holdings International Co. led gains on a report the government of Shenzhen may review land-use policies for a site the company jointly owns.

Far East Global Group Ltd. jumped 9.7 percent after analysts at Deutsche Securities Asia said it secured 19 percent of its 2013 contract target in two weeks. Yashili International Holdings Ltd., a manufacturer of dairy products, rose 1.9 percent after saying it expects to report a “substantial increase” in 2012 profit. Sunac China Holdings Ltd. slumped 7.5 percent on a share-sale plan.

The Hang Seng Index rose 0.3 percent to close at 23,658.99 in Hong Kong after falling as much as 0.4 percent. It was the highest closing level since June 2011. Volume was 13 percent below the 30-day average. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong gained 0.6 percent to 12,196.74.

“Overall, the market sentiment is good,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “We are more convinced now that the economy in China is turning more positive.”

Hong Kong stocks have gained this week after a Jan. 18 report showed China’s economic growth accelerated for the first time in two years in the fourth quarter. The measure traded at 11.5 times estimated earnings today, 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.

BOJ Decision

Futures on the S&P 500 Index rose 0.2 percent today. U.S. markets will reopen today following a public holiday.

The Bank of Japan will buy about 13 trillion yen ($146 billion) in assets per month from January 2014, including about 2 trillion in Japanese government bonds and about 10 trillion yen in treasury bills, the BOJ said in Tokyo today. The Nikkei 225 Stock Average dropped 0.4 percent.

China Merchants soared 8.8 percent to HK$28.40, the biggest daily increase since June 2009. Shenzhen International Holdings Ltd., which jumped more than 20 percent, is in talks with the city’s government on land-use rights for the Qianhai development zone on the boundary between Shenzhen and Hong Kong, according to the Hong Kong Economic Times.

Shenzhen International with China Merchants and China International Marine Containers (3899) owns about 28 percent of the 15 million square meter site, the paper said. Shenzhen International soared 21 percent to HK$1.09. International Marine jumped 18 percent to HK$16.46.

Far East

Far East Global jumped 9.7 percent to HK$2.60 after Deutsche Securities analysts Jason Ching and Tony Tsang wrote that the company secured new contract of HK$336 million in the first two weeks of the year, or 19 percent of its full-year target.

Yashili rose 1.9 percent to HK$2.66 as it expects a “substantial increase” in 2012 profit, citing expansion of sales.

Sunac China Holdings Ltd. slumped 7.5 percent to HK$6.65 on a plan to offer 300 million shares, about 9.9 percent of existing issued shares.

Sany Heavy Equipment International Holdings slumped 6.5 percent to HK$3.75 after saying its 2012 net profit fell 35 percent from a year ago, citing preliminary data.

The Hang Seng Volatility Index (VHSI) fell 4.5 percent to 13.46, indicating options traders expect a swing of 3.9 percent in the next 30 days. Futures on the Hang Seng Index (HSI) gained 0.3 percent to 23,672.

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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