Bloomberg News

Hong Kong Stocks Rise to Two-Week High on U.S. Jobs, China Data

March 08, 2013

Hong Kong stocks rose, with the Hang Seng Index (HSI) closing at its highest level in more than two weeks, as U.S. jobless claims dropped and after a report showed China’s exports rose more than forecast.

Li & Fung Ltd. (494), a supplier to Wal-Mart Stores Inc., gained 1.5 percent. Lenovo Group Ltd. (992), a Chinese maker of personal computers that gets more than half its revenue outside the country, advanced 1.9 percent. Cnooc Ltd. (883), a state-owned Chinese offshore energy explorer, increased 2.3 percent after oil prices rose. Chong Hing Bank Ltd. (1111) surged 11 percent after its chief executive officer said the Hong Kong lender is open to prospective buyers.

The Hang Seng Index gained 1.4 percent to 23,091.95, its highest close since Feb. 20. The measure advanced 0.9 percent. About seven stocks rose for each that fell. The Hang Seng China Enterprises Index of mainland companies climbed 1.5 percent to 11,484.35.

“It’s an ongoing trend of recovery in China,” said Ben Kwong, chief operating officer at brokerage KGI Asia Ltd. in Hong Kong. “We are seeing some signs of improvement in the U.S. We still have to see whether the recovery trend in those major economies can be sustainable.” Chinese bank stocks are being bought ahead of earnings reports this month, he said.

Hong Kong’s benchmark index in February capped its first monthly decline since August, led by developers in China and Hong Kong amid concern more measures will be introduced to curb property prices. The index dropped 1.1 percent this month through yesterday.

The Hang Seng Index traded at 11.1 times average estimated earnings yesterday, compared with 14 for the Standard & Poor’s 500 Index and 12.6 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

U.S. Stocks

Futures on the S&P 500 (SPX) climbed 0.3 percent today. The U.S. equity gauge gained 0.2 percent yesterday and the Dow Jones Industrial Average climbed to another record as the number of Americans who filed for unemployment benefits fell to a six-week low.

Li & Fung rose 1.5 percent to HK$10.98. HSBC Holdings Plc, which received about a fifth of its revenue from North America last year, climbed 1.8 percent to HK$84.95.

In China, exports rose 21.8 percent in February from a year earlier while imports declined 15.2 percent, the customs administration said today in Beijing. That compares with the median estimate for a 8.1 percent gain in exports and a 8.5 percent drop in imports in a Bloomberg News survey of analysts.

Economic indicators in the first two months of the year are distorted by the week-long Lunar New Year holiday, which was in January in 2012 and February this year.

Oil Prices

Lenovo climbed 1.9 percent to HK$8.72, while AAC Technologies Holdings Inc. (2018), a Chinese maker of acoustic components that gets most of its revenue outside the country, gained 0.8 percent to HK$32.20.

Cnooc advanced 2.3 percent to HK$15 after crude oil for April delivery climbed 1.3 percent yesterday in New York.

Chong Hing Bank surged 11 percent to HK$17.58 after Chief Executive Officer Lau Wai-man said the company is open to proposals from prospective buyers for all or part of the lender.

Bank of Communications Co., the mainland’s fifth-largest lender, climbed 2 percent to HK$6.06, before the release of its full-year earnings at the end of this month.

Coal Shares Rise

China Shenhua Energy Co. (1088), the country’s biggest coal producer, rose 3.9 percent to HK$29.55, and China Coal Energy Co. increased 3.4 percent to HK$7.53, the second- and third-biggest gains in the Hang Seng Index. Both stocks were down at least 14 percent this year through yesterday.

“The funds are now in rotational buying, and they are looking for laggards,” said KGI’s Kwong. Coal producers are being bought “because share prices were down quite a lot. They’re bound to have some technical rebound.”

Snack-maker Want Want China Holdings Ltd. (151), which yesterday snapped a record winning streak as brokerages downgraded its rating, jumped 6.3 percent to HK$12.10, closing at its highest level since its listing. The stock’s short-selling turnover surged yesterday and the day before to the highest in two years. The stock had the biggest gain in the Hang Seng Index.

Hang Seng Index futures rose 1.8 percent to 23,102. The HSI Volatility Index slid 4.4 percent to 14.61, indicating traders expect a swing of 4.2 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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