Hong Kong's Hang Seng Index Rises to Five-Month High as Developers Advance

Most Hong Kong stocks rose, lifting the benchmark index to the highest close in more than five months, as developers gained after Sun Hung Kai Properties Ltd. reported higher profit.

Sun Hung Kai, the world’s biggest developer by market value, climbed 0.7 percent. Sino Land Co., the Hong Kong developer controlled by billionaire Robert Ng, climbed 2.3 percent. Hengdeli Holdings Ltd. slumped 6 percent after the retail partner of Swatch Group AG in China said it plans to sell convertible bonds. China Telecom Corp. dropped 3.5 percent after reporting slowing growth in new customers.

The Hang Seng Index rose 0.1 percent to 22,002.59, the highest close since April 15, after falling as much as 0.1 percent and gaining as much as 0.6 percent. Markets will be closed Sept. 23 for the Mid-Autumn Festival.

“We favor developers in the long run, given Hong Kong’s economy relies on two main pillars: real estate and finance,” said Steve Tse, a research manager at BEA Union Investment Management. “The 22,000 level is a key psychological barrier to break. Given there will be a holiday this week, that’s also holding investors back a bit and contributing to the volatility.”

Seventeen stocks advanced for every 12 that fell in the broader Hang Seng Composite Index. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies gained 0.2 percent to 12,193.31.

Shares also gained after Lennar Corp., the third-biggest U.S. homebuilder, announced better-than-estimated earnings, boosting confidence in a global economic recovery. The Hang Seng Index has climbed 16 percent from its low for the year on May 25 amid optimism the U.S. economy will avoid falling back into a recession and that China will ease monetary policy to spur growth. Stocks on the gauge trade at an average 14.2 times estimated profit.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net.

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net.

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