Hong Kong Stocks Advance on U.S. Manufacturing Data; HSBC, Ping An Climb
(Corrects month of manufacturing data in seventh paragraph to August.)
Hong Kong stocks rose, driving the Hang Seng Index up by the most in a month as faster-than- estimated growth in U.S. manufacturing boosted optimism in a global economic recovery.
HSBC Holdings Plc, which made 20 percent of its 2009 revenue in North America, climbed 2 percent after a report it may manage a share sale in Steel Authority of India Ltd. Jiangxi Copper Co., China’s No. 1 producer of the metal, advanced 2.4 percent as commodity prices rose. Ping An Insurance (Group) Co. advanced 2.7 percent after saying it will merge its bank unit into Shenzhen Development Bank Co. Esprit Holdings Ltd., a global fashion retailer, tumbled 3.1 percent after reporting worse-than-expected full-year profit.
The Hang Seng Index rose 1.2 percent to 20,868.92 at the close, the biggest gain since Aug. 2. All but six stocks increased on the 43-member gauge. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies surged 1.7 percent to 11,688.84.
“The market has recently been bearish, and the U.S. manufacturing data gives a good catalyst to cover the shorts,” said Alex Au, managing director of Richland Capital Management Ltd. in Hong Kong, which oversees $300 million of assets.
The Hang Seng Index fell 2.4 percent last month as disappointing economic data and continued concerns about Europe’s debt and China’s measure to cool its property market damped investor confidence. That brought the stocks in the gauge to an average of 13.5 times estimated earnings, Bloomberg data show, compared with 17.2 times at the beginning of the year.
U.S. Manufacturing
HSBC climbed 2 percent to HK$77.95. The bank and JPMorgan Chase & Co. are among six banks that may manage a 10 percent share sale in Steel Authority of India Ltd., according to three people with knowledge of the matter. Yue Yuen Industrial Holdings Ltd., which makes shoes for Nike Inc., rose 0.6 percent to HK$25.30. Techtronic Industries Co., maker of Hoover vacuum cleaners and Ryobi power tools that got 76 percent of its fiscal 2009 revenue from North America, rose 2.9 percent to HK$7.06.
Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The index jumped 3 percent yesterday, the biggest gain since July 7, after the U.S.-based Institute for Supply Management’s factory index rose to a three-month high of 56.3 in August. Readings greater than 50 signal growth in manufacturing. The measure was projected to drop to 52.8 from 55.5, according to the median forecast of economists in a Bloomberg News survey.
“Investors are reacting sensitively to the positive news, while still being cautious about the overall global economy,” said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd.
Commodity Prices
Raw-material producers advanced after commodity prices rose. Jiangxi Copper jumped 2.4 percent to HK$17.58. Cnooc Ltd. climbed 0.8 percent to HK$13.32. PetroChina Co., Asia’s largest company by market value, increased 1.1 percent to HK$8.58, and China Petroleum & Chemical Corp. gained 0.9 percent to HK$6.16.
Copper futures for December delivery jumped 3.2 percent in New York yesterday, and crude-oil futures for October delivery rose 2.8 percent after the U.S. manufacturing data raised confidence consumption of the commodities will increase.
Energy companies also gained after the Shanghai Securities News reported China may invest between 250 billion yuan ($36.7 billion) and 300 billion yuan in drilling equipment. The report cited Jin Xiaojian, Cnooc’s projects engineering director, as saying the company plans to add 50 million tons of production capacity for oil and natural gas off the nation’s shores between 2011 through 2015.
Auto Sales
Ping An Insurance gained 2.7 percent to HK$66.10 after surging as much as 7.5 percent after saying it will buy 1.64 billion shares in Shenzhen Development Bank. Shares of the insurer had been suspended since June 30.
Guangzhou Automobile Group Co., a partner of Toyota Motor Corp. and Honda Motor Co. in China, soared 8.1 percent to HK$9.86 after China Automotive Technology & Research Center said yesterday the nation’s retail passenger-car sales in August rose 59.3 percent from a year earlier to 977,330 units.
Among stocks that fell, Esprit declined 3.1 percent to HK$42.90 after rising as much as 1.7 percent in early trading. The company said during the midday trading break that net income for the year ended June fell 11 percent to HK$4.23 billion ($544 million) from HK$4.75 billion. The average estimate of 11 analysts surveyed by Bloomberg was HK$4.42 billion.
To contact the reporter on this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net.
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