Hong Kong Stocks Rises Most in Seven Months on Greece Optimism
Hong Kong’s stocks rose, sending the Hang Seng Index to its biggest gain in seven months, amid optimism European nations will pledge more funds for Greece to resolve its debt crisis, and as coal companies advanced.
Cosco Pacific Ltd. (1199), which operates container facilities at Piraeus, Greece’s largest port, climbed 3.8 percent, while HSBC Holdings Plc (HSBA), Europe’s No. 1 bank by market value, advanced 1.7 percent. China Shenhua Energy Co., a unit of the country’s biggest coal producer, rose 3.2 percent after benchmark power- station coal prices rose for a seventh week. The Hang Seng Index climbed for a sixth day, gaining 2.2 percent to 23,684.13 at the close, its steepest increase since Nov. 1. The gauge posted its longest winning streak since the period ended Jan. 6, though it is still down 0.2 percent for the month. All but one stock advanced on the 45-member gauge. The Hang Seng China Enterprises Index of Chinese companies’ H shares rose 2 percent to 13,268.39.
“There is more risk-conviction, given easing fears over Greece,” said Gavin Parry, managing director of Parry International Trading Ltd. in Hong Kong.
Cosco Pacific advanced 3.8 percent to HK$15.42, while HSBC rose 1.7 percent to HK$82. Esprit Holdings Ltd. (330), which got 83 percent of its fiscal 2010 revenue from Europe, gained 2.8 percent to HK$29.25. Li & Fung Ltd., which received about a quarter of its sales from Europe last fiscal year, advanced 2.7 percent to HK$17.28.
European Union leaders will decide on additional aid for Greece by the end of June and have ruled out a “total restructuring” of the nation’s debt, said Jean-Claude Juncker, head of the euro-area finance ministers’ group. Greek Prime Minister George Papandreou said last week he’ll press ahead with new austerity measures after failing to win backing from the main opposition parties.
Germany may stop demanding an early rescheduling of bonds for Greece so that Greece can get a new package of loans, the Wall Street Journal reported, citing unidentified people.
The Hang Seng Index (HSI) has risen 0.7 percent this year through yesterday as corporate profits and economic reports eased concern Japan’s nuclear crisis and Europe’s debt problems will slow global economic growth.
Shares in the gauge traded at an average 12.4 times forecast earnings yesterday, compared with 14.4 times at the end of last year, according to data compiled by Bloomberg.
China Shenhua Energy climbed 3.2 percent to HK$38.65. China Coal Energy Co., the country’s second-largest coal producer, increased 2.9 percent to HK$10.52.
Benchmark power-station coal prices at China’s Qinhuangdao port rose 0.6 percent to between 830 yuan and 845 yuan a metric ton as of May 30 compared with a week earlier, according to the China Coal Transport and Distribution Association. That’s the highest level since October 2008.
China will raise electricity prices for business and farmers from June, the first increase in more than a year, according to an official with the National Development and Reform Commission, the top economic planner, who declined to be identified because of internal rules.
Coal companies may “benefit from power tariff normalization,” Citigroup Inc. wrote in a report dated yesterday. The brokerage continues to favor China Resources Power Holdings Co. and Yanzhou Coal Mining Co., it said.
China Resources Power, the Hong Kong-listed mainland electricity producer that develops, owns and operates coal-fired power plants in China, rose 2.7 percent to HK$15.62. Yanzhou Coal jumped 4.7 percent to HK$32.50.
I.T Ltd., a Hong Kong clothier that sells fashion brands including D&G and Fred Perry, surged 16 percent to HK$7.35 after reporting a 48 percent increase in full-year profit.
Hutchison Whampoa Ltd. (13), controlled by billionaire Li Ka- shing, jumped 5 percent to HK$90, the second-biggest gain in the Hang Seng Index.
Husky Energy Inc., a Canadian energy producer owned by Li, said in a statement yesterday it may seek a secondary listing in Hong Kong. Li owns about 70 percent of Husky personally and through Hutchison Whampoa.
Futures on the Hang Seng Index increased 1.9 percent to 23,543. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, fell 5.8 percent to 17.26, indicating options traders expect a swing of 4.9 percent in the Hang Seng Index in the next 30 days.
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