Hong Kong stocks rose, with the benchmark index advancing to its highest close this year, after data showed China’s factory activity expanded at the fastest pace since December.
Galaxy Entertainment Group Ltd. (27), the gaming company controlled by billionaire Lui Che-woo, advanced 4.8 percent to lead the Hang Seng Index (HSI) as Bank of America Corp.’s Merrill Lynch unit said Macau casino revenue will rebound this month. Anhui Conch Cement Co., China’s largest producer of the building material, climbed 3.6 percent. China Overseas Land & Investment Ltd., the largest mainland developer listed in Hong Kong, rose 4.2 percent after UBS AG said property sales volume for some cities rebounded last week.
The Hang Seng Index climbed 1.6 percent to 23,549.62 in Hong Kong, closing at its highest since Dec. 10. Volume on the gauge was 36 percent higher than the 30-day average. The Hang Seng China Enterprises Index, also known as the H-share index, added 1.1 percent to 10,448.17. Markets in the city were shut for a holiday yesterday.
“Investors remain quite positive, helped by encouraging Chinese manufacturing data,” said Ben Kwong, director of brokerage KGI Asia Ltd. “The strength of the Hong Kong dollar reflects fund flows remain quite favorable for the time being, but we need to see whether this trend will continue.”
China’s official gauge of factory activity released yesterday climbed to 51 in June, matching analysts’ median estimate and rising from 50.8 the month before. A survey of the sector from HSBC Holdings Plc and Markit Ltd. rose to 50.7 from 49.4 in May. Readings above 50 signal growth.
Anhui Conch gained 3.6 percent to HK$27.55. Jiangxi Copper Co. (358), China’s biggest producer of the metal, jumped 7.2 percent to HK$13.14. Aluminum Corp. of China Ltd., the nation’s leading producer of the light metal, increased 3.2 percent to HK$2.87.
Hong Kong Dollar
The Hong Kong Monetary Authority, the city’s de facto central bank, stepped in for the first time since December 2012 to prevent the city’s currency from rising against the U.S. dollar, as demand rose on commercial activities.
The H-share index fell 4.5 percent in the first half as investors weighed whether China’s stimulus was enough to prop up growth. The measure traded at 7.3 times estimated earnings today, compared with 10.9 for the Hang Seng Index and a multiple of 16.7 on the Standard & Poor’s 500 Index yesterday.
Futures on the S&P 500 rose 0.1 percent. The underlying gauge climbed 0.7 percent to a record yesterday, while the Dow Jones Industrial Average also rose to an all-time high amid optimism for global manufacturing.
The Institute for Supply Management’s U.S. factory index was little changed at 55.3 in June from 55.4. A private survey today may show U.S. employers hired more workers in June than in May. Official jobs data are due tomorrow ahead of the U.S. Independence Day holiday.
Macau’s casino revenue fell for the first time in five years last month as the World Cup competed for bettors’ attention. Total gross gaming revenue dropped 3.7 percent to 27 billion patacas ($3.4 billion) last month, according to Macau’s Gaming Inspection and Coordination Bureau, compared with the 4 percent decline expected by analysts surveyed by Bloomberg News. Revenue will resume growth in the second half, Merrill Lynch analysts led by Billy Ng wrote.
Galaxy rose 4.8 percent to HK$65. SJM Holdings Ltd. (880), Asia’s biggest casino operator, gained 3.5 percent to HK$20.10. Sands China Ltd., a unit of Las Vegas Sands Corp., climbed 3 percent to HK$60.30.
Mainland developers advanced. China Overseas Land rose 4.2 percent to HK$19.58. Shimao Property Holdings Ltd. climbed 3.7 percent to HK$14.76. Guangzhou R&F Properties Co. (2777), a builder in the southern Chinese city, advanced 2.7 percent to HK$9.83.
Property sales volume for top 41 Chinese cities rose 13 percent last week from the previous week, UBS said, naming China Overseas Land and Shimao properties as some of its top picks.
Li & Fung
Li & Fung Ltd. (494), the world’s biggest supplier of clothes and toys to retailers, climbed 1.6 percent to HK$11.66. The stock extended gains amid optimism for its Global Brands Group spinoff, which will list shares on July 9.
Hong Kong markets were shut yesterday for the anniversary of the city’s return to Chinese rule in 1997, with protesters taking to the streets for the biggest rally in a decade to demand full democracy and oppose Chinese control over leadership elections. At least 510,000 people took part in the march, Johnson Yeung of Civil Human Rights Front said, while police tallied 98,600, broadcaster RTHK said.
To contact the reporter on this story: Kana Nishizawa in Hong Kong at firstname.lastname@example.org