Hong Kong stocks (HSI) rose on the opening trading day this year as manufacturing expanded in India and China and as economists forecast the U.S. labor market will improve. Chinese refiners gained on a report they may be allowed to set oil prices.
Li & Fung Ltd. (494), a supplier to Wal-Mart Stores Inc. that gets more than half of its revenue from the U.S., gained 6 percent. Cnooc Ltd. (883), China’s No. 1 offshore oil producer, increased 4.1 percent as crude prices rose. PetroChina Co. jumped 4.5 percent after the report that China may allow refiners to set oil-product prices instead of the government. China Mengniu Dairy Co. (2319), a Chinese milk producer, rose 5.7 percent after China International Capital Corp. maintained its “buy” rating on the stock.
The Hang Seng Index rose 2.4 percent to 18,877.41, its highest close since Dec. 8. All but six stocks advanced in the 48-member gauge, which tumbled 20 percent last year, its first annual drop since 2008. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong climbed 3 percent to 10,235.17.
“After the New Year, people are repositioning themselves again and there is some fresh buying in the market,” said Alex Wong, asset-management director at Ample Capital Ltd. in Hong Kong. “The momentum will probably remain on the upside, but I’m still cautious. At this level, I don’t think people will be very aggressive in buying across the board.”
The Hang Seng Index tumbled last year amid concern Europe’s debt crisis and China’s monetary tightening will slow global growth. Companies in the gauge traded at 10 times forecast earnings (HSI) at the last close, down from 14.4 times at the beginning of 2011, according to data compiled by Bloomberg. The Standard & Poor’s 500 Index traded at 12.7 times.
Li & Fung jumped 6 percent to HK$15.24, the biggest gain (HSI) in the Hang Seng Index (HSI), while Techtronic Industries Co., which makes Ryobi power tools, advanced 5.1 percent to HK$8.40. Cosco Pacific Ltd., which operates container terminals in China and Greece, advanced 4.6 percent to HK$9.49.
The Purchasing Managers’ Index in China rose to 50.3 points in December from 49 the previous month, the Beijing- based logistics federation said on Jan. 1. In India, it gained to 54.2 from 51 in November, HSBC Holdings Plc and Markit Economics said in an e-mailed statement yesterday. A number above 50 indicates manufacturing expanded.
A report this week will probably show that hiring in the U.S. accelerated in December, a sign that the country’s improving labor market will bolster consumer spending in early 2012.
Payrolls climbed by 150,000 workers after rising 120,000 in November, according to the median forecast of 62 economists in a Bloomberg News survey before the Labor Department release on Jan. 6. Another report (NAPMPMI) this week may show manufacturing picked up in the U.S., economists said.
“Positive economic data provide a catalyst for a small new-year rally,” said Pauline Dan, Hong Kong-based chief investment officer at Samsung Asset Management, which oversees about $72 billion. “We’ll probably see more headwinds from Europe.”
Cnooc advanced 4.1 percent to HK$14.14 after crude oil for February delivery jumped as much as 2.1 percent to $100.91 a barrel in New York today. PetroChina rose 4.5 percent to HK$10.10 and China Petroleum & Chemical Corp. (600028), known as Sinopec, gained 5.5 percent to HK$8.62.
The 21st Century Business Herald reported China may let the three biggest state-owned refiners set oil product prices, citing unidentified people involved in formulating a plan. The change would enable refiners to adjust more quickly to changes in global prices of crude oil, the report said.
China Mengniu Dairy, which plunged 34 percent last month after saying moldy feed given to cows led to excessive levels of a toxin in its milk, gained 5.7 percent to HK$19.20. China International Capital maintained its “buy” rating on the stock, and said it expects the company to post 27 percent growth in net income for 2011.
Gome Electrical Appliances Holdings Ltd. (493), a retailer of household appliances, climbed 8.9 percent to HK$1.96. Haier Electronics Group Co., a washing machine maker, jumped 6.5 percent to HK$7.40 and Skyworth Digital Holdings Ltd. (751), a television maker, increased 7 percent to HK$2.91.
China National Radio reported the nation may introduce incentives to boost consumer spending as early as next week, citing Shen Danyang, a spokesman for the Commerce Ministry. The home appliance trade-in policy that ran from June 2009 through the end of last year spurred 300 billion yuan ($47.6 billion) of purchases through the end of November, the report said, citing statistics from the ministry.
Futures on the Hang Seng Index increased 1.9 percent to 18,810. The HSI Volatility Index (VHSI) rose 1.2 percent to 24.92 today, indicating options traders expect a swing of 7.1 percent in the benchmark over the next 30 days.
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