Bloomberg News

Hong Kong Stocks Rise on U.S. Stimulus, China GDP Targest

March 04, 2013

Hong Kong stocks rose, with the benchmark index rebounding from yesterday’s loss, amid speculation the Federal Reserve will continue easing measures, and after China maintained its economic-growth target for 2013.

Techtronic Industries Co. (669), a power-tool maker that counts the U.S. as its biggest market, rose 3.7 percent. BYD Co. (1211), the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., gained 2.7 percent to lead automakers higher. HSBC Holdings Plc (HSBA), Europe’s largest bank, fell 0.7 percent after full-year profit declined.

The Hang Seng Index rose 0.1 percent to 22,567.22 as of 10:43 a.m. in Hong Kong after yesterday dropping 1.5 percent, led by developers after China tightened mortgage rules to cool the property market. About three stocks advanced for each two that fell in the 50-member gauge, with trading volume about 17 percent below its 30-day intraday average, according to data compiled by Bloomberg. The Hang Seng China Enterprises Index of mainland companies climbed 0.2 percent to 11,127.02.

“At this level, it’s a good time to buy,” said Peter Lai, director of sales at brokerage DBS Vickers Hong Kong Ltd. The markets overreacted yesterday “because the aim of the Chinese government is to stabilize property prices, not to kill the whole sector. In the medium term, I’m still optimistic because of quantitative easing. The world is flooded with money. Printed money being circulated will encourage people to hold assets.”

Hong Kong’s benchmark index last week erased this year’s gains as developers slid on concern China may introduce more measures to curb property prices. The gauge traded at 10.9 times average estimated earnings yesterday, compared with 13.8 for the Standard & Poor’s 500 Index and 12.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

China Growth

China today maintained its economic-growth target at 7.5 percent for 2013 while setting a lower inflation goal of 3.5 percent, setting up a challenge for new leaders to keep prices in check without harming expansion. The median estimate of 43 analysts surveyed in February by Bloomberg News is for growth of 8.1 percent in 2013. Chinese lawmakers began their annual meeting of the National People’s Congress in Beijing today.

Hang Seng Index (HSI) futures rose 0.1 percent to 22,497. The HSI Volatility Index (VHSI) slid 4.1 percent to 16.18, indicating traders expect a swing of 4.6 percent for the equity benchmark in the next 30 days.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

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


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