Cnooc Ltd. (883), China’s biggest offshore energy explorer, climbed 1.9 percent. China Merchants rose 5.2 percent after Deutsche Bank AG recommended the port operator’s shares. Weichai Power Co. (2338) advanced 6.5 percent after the diesel-engine maker announced it took control of Germany’s Kion Group AG. China Mengniu Dairy Co. declined the most on the Hang Seng Index (HSI) after Macquarie Group Ltd. said infant-formula consumption on the mainland will peak in 2017.
The Hang Seng Index rose 0.6 percent to 23,319.17 at the close in Hong Kong, rising 1.6 percent for the week. The Hang Seng China Enterprises Index, also known as the H-share index, added 0.8 percent to 10,516.98. Shares maintained gains after China released reports on retail sales and factory output today.
“Overall data continues to support the economy is bottoming out and it should begin to show a firmer tone going forward,” said Sandy Mehta, chief executive officer of Value Investment Principals Ltd. “Investors will likely remain selective on individual stocks and sectors, but are increasingly looking to increase allocation to Asia.”
Futures on the Standard & Poor’s 500 Index climbed 0.1 percent today. The underlying gauge fell 0.7 percent yesterday as a U.S. retail sales report for May missed estimates. Industrial and consumer-discretionary shares plunged as escalating violence in Iraq sent oil to an eight-month high.
Oil futures rose as much as 1.1 percent in New York today. The strife in Iraq, three years after U.S. troops withdrew, has raised the prospect of a return to civil war in OPEC’s second-biggest oil producer. Security forces sought to check the rapid advance of Islamist militants who have seized major cities, as Prime Minister Nouri al-Maliki responded to the greatest threat to his government since taking power.
Cnooc rose 1.9 percent to HK$13.86. China Petroleum & Chemical Corp. (386), also known as Sinopec, gained 1.8 percent to HK$7.44.
China retail sales gained 12.5 percent in May from a year earlier, beating the 12.1 percent median estimate in a Bloomberg survey and rising from 11.9 percent the previous month. China’s factory-output growth last month accelerated to 8.8 percent from a year earlier, meeting economists expectations, after a 8.7 percent rate in April.
Hong Kong’s benchmark index rebounded 10 percent since falling to an eight-month low in March, as China introduced stimulus including reserve-ratio cuts to counter the slowdown. The equity gauge traded at 10.8 times estimated earnings today, compared with 16.3 for the S&P 500 Index at the last close.
In a boost to growth, a report after the market closed yesterday showed new local-currency loans in China last month rose to 870.8 billion yuan ($140 billion). That topped the 750 billion yuan median estimate of 43 analysts surveyed by Bloomberg. Aggregate financing, China’s broadest measure of new credit, was 1.4 trillion yuan in May, matching the median analyst estimate.
Weichai Power gained 6.5 percent to HK$31.10, leading a measure of industrial companies higher on the Hang Seng Composite Index. The company resumed trading today after announcing it had obtained control over Germany’s Kion.
China Merchants Holdings advanced 5.2 percent to HK$24.15, after Deutsche Bank said the stock is its top pick among mainland port operators. The stock sank 5.6 percent last month after a 9 percent tumble in April.
HKT Ltd., a unit of billionaire Richard Li’s PCCW Ltd., fell 4.3 percent to HK$8.25 after saying it plans to raise $998 million through a rights issue for refinancing, including debt from acquiring the CSL mobile-phone business in Hong Kong.
China Mengniu dropped 2.7 percent to HK$35.50, while milk-powder maker Biostime International Holdings Ltd. lost 3.3 percent to HK$49. Macquarie said in a report yesterday it sees China’s infant formula consumption volume growing at a barely 5 percent compound annual growth rate before total consumption starts to decline.
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