Hong Kong stocks rose to a one-week high as speculation of Chinese government support measures offset concerns about slowing growth in the nation’s economy.
Aluminum Corp. of China Ltd., the nation’s largest supplier of the light metal, jumped 3.1 percent after the Shanghai Securities News reported China may issue policies to boost usage of the material. China Overseas Land & Investment Ltd. (688) climbed the most in five weeks after Deutsche Bank AG said the company is likely to exceed its sales targets. GCL-Poly Energy Holdings Ltd. (3800) surged 9.5 percent after a profit forecast from U.S. peer First Solar Inc. beat expectations.
The Hang Seng Index rose 0.8 percent to 22,034.56, its highest close since April 3. The Hang Seng China Enterprises Index, which tracks mainland companies, increased 0.8 percent to 10,694.23 even after data on the nation’s exports missed expected. The two gauges rose yesterday by the most in three weeks as slower-than-estimated inflation data in China eased pressure on policy makers to tighten credit.
“Although last month’s export figure wasn’t good, in the future the government still has the tools to push up the economy,” said Lewis Wan, Hong Kong-based chief investment officer at Pride Investments Group Ltd., which oversees about $250 million. “When inflation is controlled, the government has more power to adopt loosening policies.”
Trading volumes in the Hang Seng Index (HSI) were 15 percent below the 30-day intraday average. The gauge’s futures added 0.6 percent to 21,966. The HSI Volatility Index (VHSI) dropped 3.6 percent to 16.14, indicating traders expect a swing of 4.6 percent for the equity benchmark in the next 30 days.
China’s exports climbed 10 percent last month from a year earlier, the customs administration said today. That compares with 21.8 percent growth in February and the 11.7 percent median estimate in a Bloomberg News survey of 36 economists. Imports rose by an above-forecast 14.1 percent in March, leaving an unexpected trade deficit of $880 million.
“We still have to see whether export growth will continue to slow or accelerate,” said Ben Kwong, chief operating officer at brokerage KGI Asia Ltd. in Hong Kong. “If you look at import growth in March, which was higher than export growth, it may be suggesting a recovery of economic activities. It’s very difficult to highlight a clear trend.”
The Hang Seng Index briefly erased its gain today after BHP Billiton Ltd. (BHP)’s chief financial officer said he expects China’s economic growth to slow. Prospects in China, BHP’s biggest customer, present the main risk for the world’s largest mining company, CFO Graham Kerr said today at the Bloomberg Australia Economic Summit in Sydney.
The Hang Seng Index fell 8.2 percent through yesterday from a Jan. 30 high amid an outbreak of a new strain of bird flu in China and as Cyprus’s banking woes reignited concern about the Europe’s debt crisis. The measure traded at 10.5 times estimated earnings yesterday, compared with its five-year average of 12.9 and the Standard & Poor’s 500 Index’s multiple of 14.2, data compiled by Bloomberg show.
A measure of industry goods companies, which includes GCL- Poly, climbed 2.1 percent, the biggest gain among the 11 groups in the Hang Seng Composite Index.
GCL-Poly, the world’s biggest producer of polysilicon, surged 9.5 percent to HK$1.61, and Solargiga Energy Holdings Ltd. (757), a Chinese maker of solar wafers, jumped 8.4 percent to 38.5 Hong Kong cents. First Solar, the world’s largest thin-film solar manufacturer by output, forecast earnings will be $4 to $4.50 a share, exceeding the $3.57 average of 23 analysts’ estimates compiled by Bloomberg.
Aluminum Corp. of China rose 3.1 percent to HK$2.99 and United Co. Rusal (486), the world’s largest aluminum producer, gained 4.9 percent to HK$4.30. China may issue policies to boost aluminum use, the Shanghai Securities News reported, citing Chen Quanxun, chairman of the China Nonferrous Metals Industry Association.
Jiangxi Copper Co., China’s largest supplier of the metal, climbed 1.1 percent to HK$16.82 after the London Metal Exchange Index of industrial metals advanced 1.9 percent yesterday, the most since Jan. 2.
China Overseas Land rose 3.1 percent, the most since March 6, to HK$21.55. The developer’s contracted sales in March accelerated from a month earlier, indicating strong sales, Deutsche Bank said in a report dated today. The company is likely to exceed its contracted sales target for 2013, and there is upside potential to consensus estimates, it said.
China Resources Land Ltd., the second-biggest mainland property company traded in Hong Kong, advanced 3.4 percent to HK$21.50, while Country Garden Holding Co. (2777), based in China’s southern province of Guangdong, rose 2.8 percent to HK$4.07.
Cathay Pacific Airways Ltd. (293), Asia’s biggest international carrier, slid 2.2 percent to HK$12.72 after a two-day, 5.9 percent surge. China Southern Airlines Co. (1055), the country’s biggest domestic carrier, slumped 3.1 percent to HK$4.01 after the shares jumped 7 percent in the past two days.
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