Hong Kong Stocks Rebound From Two-Month Low; Shenhua Energy, Chalco Rise

Hong Kong’s benchmark stock index rebounded from a two-month low after China Shenhua Energy Co. said it will buy assets from its parent, and as commodity producers climbed along with metal prices.

Shenhua, a unit of China’s No. 1 coal producer, gained 3.7 percent after saying the acquisitions will boost its coal reserves by 24 percent. Aluminum Corp. of China Ltd., a unit of the nation’s largest maker of the lightweight metal, rose 1.2 percent after the China Daily said the company’s parent forecast a profit for the unit this year. China Resources Land Ltd., a state-controlled developer, gained 3 percent after a survey showed higher property sales in most Chinese cities.

“China is taking an incredible amount of momentum into 2011,” Patrick Bennett, a Hong Kong-based strategist at Standard Bank Group Ltd., told Bloomberg Television. “Asia in general needs more infrastructure to be built over the next 5, 10, 15 years. That’s going to continue to provide a huge demand for industrial commodities.”

The Hang Seng Index advanced 1.6 percent, its biggest advance since Nov. 18, to close at 22,993.86, having closed yesterday at its lowest level since Oct. 4. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies gained 1.6 percent to 12,607.43.

The Hang Seng Index has recovered 21 percent from this year’s low on May 25 on speculation that growth in corporate earnings will overcome concerns about the pace of the U.S. economic recovery and China’s steps to curb rising property prices. Shares in the gauge trade at an average 14.4 times estimated earnings, compared with 12.7 times on May 25.

Chalco Profit

Shenhua advanced 3.7 percent to HK$32.30. The company will pay 8.7 billion yuan ($1.3 billion) to buy assets and companies from its parent and some of its subsidiaries. Shenhua will buy major operational assets including mining rights, and nine companies, according to statements.

Aluminum Corp., known as Chalco, increased 1.2 percent to HK$7.02. Xiong Weiping, chairman of parent Aluminum Corp. of China, said he expects Chalco to post a profit for this year, according to the China Daily.

Jiangxi Copper Co., China’s biggest producer of the metal, rose 0.6 percent to HK$24.65.

The London Metal Exchange Index, which tracks six metals including copper and aluminum, advanced 1.1 percent yesterday.

China Resources Land gained 3 percent to HK$13.98. Agile Property Holdings Ltd., a mainland developer, jumped 5.6 percent to HK$11.32. Guangzhou R&F Properties Co. rose 4 percent to HK$10.88 after the developer said contracted sales as of Dec. 19 reached 30.7 billion yuan, exceeding its full-year target.

Sun Hung Kai

United Energy Group Ltd. halted trading in its shares, after surging 7.8 percent to HK$1.79. The Hong Kong investment holding company said it entered into a five-year cooperation agreement with China Development Bank Corp.’s branch in the city on energy and mineral-resources projects.

Sun Hung Kai Properties Ltd., Hong Kong’s No. 1 developer by market value, gained 1.7 percent to HK$129.40. The company plans to start selling its Park Nara development in the city next month at about HK$4,800 per square foot ($617), or 43 percent higher than existing homes in the same district, the Apple Daily newspaper reported, citing people it didn’t identify.

Li Ning Co. dropped 5.3 percent to HK$16.94, extending yesterday’s 16 percent decline. The Chinese sportswear maker, set up by a former Olympic gymnast of the same name, said last night sportswear orders may “come under pressure” in its next two quarterly trade fairs.

All but one stocks advanced among the 45 constituents of the Hang Seng Index. Its futures rose 1.2 percent to 22,960.

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

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

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