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Hong Kong Stocks Climb for a Third Week; China Unicom Advances

Hong Kong stocks rose, sending the Hang Seng Index to its third weekly gain, as China Unicom (Hong Kong) Ltd. and HSBC Holdings Plc (5) advanced after analysts forecast growth.

China Unicom, the nation’s second-largest mobile operator, jumped 6.5 percent after UBS AG raised its share-price estimate. HSBC, Europe’s biggest bank, gained 1 percent after Goldman Sachs Group Inc. recommended buying the stock on earnings prospects. Li & Fung Ltd. (494), the biggest supplier to retailers including Wal-Mart Stores Inc., gained 2.3 percent after data signaled the U.S. labor market is recovering. China Gas Holdings Ltd. (384) jumped 5.7 percent on a takeover report.

“Most investors are still optimistic about the near term, with the overall turnover being quite large,” said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. “We are seeing fund flow from outside, and that may continue for the short term.”

The Hang Seng Index (HSI) climbed 0.5 percent to 24,396.07 at the close, gaining 2.5 percent for the four-day week that was shortened by a holiday. About three stocks rose for every two that fell on the 45-member Hang Seng Index. The Hang Seng China Enterprises Index of Chinese companies’ H-shares were little changed at 13,652.92.

China Unicom jumped 6.5 percent to HK$14.42, the steepest gain in the Hang Seng Index. UBS raised its 12-month share-price estimate by 47 percent to HK$20, citing the company’s “explosive” growth in third-generation mobile-phone subscribers.

Biggest Driver

HSBC increased 1 percent to HK$85.15, the biggest contributor to the Hang Seng Index’s advance.

“We expect earnings recovery and improving revenue growth for HSBC ex-Asia in the next few years,” Goldman Sachs, which has a “buy” rating on the stock, said in a report dated today. “We think it is worth buying HSBC for Asia earnings prospects alone.”

Futures on the Standard & Poor’s 500 Index added 0.3 percent today. The index rose as much as 0.2 percent yesterday as reports showed a drop in jobless claims and improving retail sales. The gauge closed 0.2 percent lower after another strong aftershock shook Japan and a dispute over the federal budget threatened to shut down the American government.

U.S. Jobs

Applications for jobless benefits fell 10,000 in the week ended April 2 to 382,000, the fewest since Feb. 26, U.S. Labor Department figures showed yesterday.

Li & Fung gained 2.3 percent to HK$40.50. Foxconn International Holdings Ltd., the world’s largest contract maker of mobile phones, increased 0.9 percent to HK$4.72.

The Hang Seng Index rose 5.4 percent this year through yesterday, compared with a 0.3 percent gain for the same period last year. Shares in the gauge traded at an average 12.8 times forecast earnings yesterday, compared with 14.4 times at the end of last year, according to data compiled by Bloomberg.

China Gas surged 5.7 percent to HK$3.74 after dealReporter said that PetroChina Co. is considering making a bid for the company. PetroChina’s spokesman Mao Zefeng said today it has no immediate plan to buy a listed gas company. PetroChina fell 1.2 percent to HK$12.

Futures on the Hang Seng Index rose 0.5 percent to 24,422. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, dropped 1 percent to 16.72, indicating options traders expect a swing of 4.8 percent in the Hang Seng Index in the next 30 days.

To contact the reporter on this story: Kana Nishizawa in Tokyo at knishizawa5@bloomberg.net

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

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