Hong Kong's Stock Index Rises to 10-Month High; Developers Gain on Sales

Hong Kong stocks rose, driving the benchmark index to a 10-month high, after China’s premier said the nation will boost domestic demand, and on optimism economic growth will improve.

PetroChina Co., the world’s second-biggest company by market value, leapt 5.5 percent. Sun Hung Kai Properties Ltd. rose 1.3 percent after Hong Kong’s two largest developers sold more than HK$11 billion ($1.42 billion) in new properties over the long holiday weekend. BOC Hong Kong (Holdings) Ltd., a local unit of China’s fourth-largest bank, gained 2.4 percent after Morgan Stanley lifted its share-price forecast for the stock. Shares also rose after China said manufacturing and services industries expanded.

“China’s confidence is clearly on the rise, and it’s shifting the growth orientation of the economy back toward the domestic side,” Erwin Sanft, a Hong Kong-based strategist at BNP Paribas SA, said in a Bloomberg Television interview. “Consumption is certainly a good place to be if you’re investing in Chinese equities.”

The Hang Seng Index climbed 1.2 percent to 22,618.66, its highest close since Nov. 23.

The stock gauge surged 11 percent in the quarter ended Sept. 30, as corporate earnings and economic reports boosted confidence the global recovery will not falter. That’s the biggest quarterly increase since the same period last year. Stocks in the measure trade at an average 14.6 times estimated earnings, compared with 17.2 times at the beginning of this year.

PetroChina, Cnooc

The Hang Seng China Enterprises Index of so-called H shares of Chinese companies advanced 1.7 percent to 12,614.18.

PetroChina rallied 5.5 percent to HK$9.53. Cnooc Ltd., China’s biggest offshore energy producer, surged 4.9 percent to HK$15.78. China Coal Energy Co., a unit of the country’s second- biggest producer of the fuel, advanced 4.4 percent to HK$13.40. Dongfeng Motor Group Co., a Chinese partner of Nissan Motor Co., climbed 2.5 percent to HK$16.28.

China will address “structural problems” and stabilize its economy by increasing domestic demand, Premier Wen Jiabao said in an interview with CNN taped Sept. 23 in New York and broadcast yesterday.

Separately, China’s non-manufacturing industries expanded at a faster pace in September behind increases in construction and consumer spending. A purchasing managers’ index released yesterday by the China Federation of Logistics and Purchasing rose to 61.7 from 60.1 in August. The data follow a jump to a four-month high for the manufacturing PMI announced on Oct. 1.

Sun Hung Kai

Sun Hung Kai rose 1.3 percent to HK$135.70. Cheung Kong (Holdings) Ltd., Hong Kong’s No. 2 developer by market value, gained 1 percent to HK$118.80. Sino Land Co., controlled by billionaire Robert Ng, advanced 3.1 percent to HK$16.56.

Sun Hung Kai, the world’s biggest developer by market value, sold 132 houses at its Valais project in the Sheung Shui district over the three-day holiday, generating revenue of close to HK$4 billion, it said.

Cheung Kong sold all 1,143 apartments at Oceanaire in the Ma On Shan district, four days after the project was launched, sales director Francis Wong said.

BOC Hong Kong gained 2.4 percent to HK$25.20. Morgan Stanley lifted its share-price estimate for the stock to HK$29.50 from HK$25, according to a research report today.

Neo-China Land Group (Holdings) Ltd., a Chinese real estate developer, rallied 16 percent to HK$4. The company said a venture in which it has a 25 percent stake won bidding to buy an 8.73 hectare site in Shanghai’s Minhang district for 2.43 billion yuan.

Sands China

China State Construction International Holdings Ltd., a construction-service provider, soared 14 percent to HK$5.34, after saying it will buy a stake in a Macau residential development from affiliated China Overseas Land & Investment Ltd.

Neo-China and China State Construction posted the biggest gains among the 320 members of the Hang Seng Composite Index.

Sands China Ltd., a unit of billionaire Sheldon Adelson’s Las Vegas Sands Corp., jumped 6 percent to HK$14.84, after soaring as much as 15 percent. Goldman Sachs Group Inc. raised its rating on the stock to “buy” from “neutral.”

Trading in Zijin Mining Group Co., China’s biggest gold producer, was halted ahead of a statement on the penalty for the July acid-waste pill at its largest copper mine.

Futures on the Hang Seng Index gained 1.4 percent to 22,630. All but 12 stocks rose among the gauge’s 45 constituents.

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.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.