Hong Kong stocks rose, with the benchmark index climbing for a seventh day, as the city’s developers led the advance.
Wharf Holdings Ltd., a property company that gets most of its revenue in Hong Kong, rose 3.4 percent. Convoy Financial (1019) Services Holdings Ltd. jumped 6.5 percent after saying it expects first-half profit to rise. First Shanghai Investments Ltd. dropped 3.7 percent after the brokerage jumped 25 percent the past two days. Wing Hang Bank Ltd. was suspended from trading after Singapore’s Oversea-Chinese Banking Corp. said it will take the lender private.
Hang Seng Index (HSI) added 0.4 percent to 24,732.21 at the close, capping its longest winning streak since October 2012. The index is headed for a 6.7 percent jump this month, its steepest such increase since September 2012. Volume on the measure today was 84 percent above its 30-day average. The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, was little changed at 11,119.32 after gaining as much as 1.2 percent.
“Market momentum is still being supported by the inflow of funds into Hong Kong,” said Kenny Tang, general manager of AMTD Financial Planning Ltd. “Investor sentiment is quite good,” although it’s normal to see some selling at these levels.
H-shares entered a so-called bull market this week, rising at least 20 percent from a March low, after China cut reserve requirements for some banks and loosened property curbs to support growth. The measure traded at 7.7 times estimated earnings at close compared with 16.5 for the Standard & Poor’s 500 Index. The H-share measure’s 2.8 percent gain this year lags a 6.6 percent advance for the U.S. equity gauge.
China may take “heavy” measures such as tax and financing reform in the second half to ensure economic growth, the China Securities Journal said in a front-page commentary today.
Demand for the city’s currency continued to be strong, prompting the Hong Kong Monetary Authority, the city’s de facto central bank, to buy $410 million during New York and London hours to defend the city’s peg to the U.S. dollar.
China’s ruling Communist Party announced an investigation of former security chief Zhou Yongkang, escalating an 18-month campaign against graft with the highest-profile case in its 65 years in power. The probe will boost market sentiment as it allows the government to shift focus to economic reforms from corruption, according to Bank of America Corp. analyst Lu Ting.
PetroChina Co. added as much as 2.9 percent after Citic rated the shares a buy, saying the end of the anti-graft drive will remove negative factors hanging over the company’s operations. Former Chairman Jiang Jiemin, who was connected to Zhou at China National Petroleum Corp., was ousted as head of the commission overseeing state-owned companies after the government on Sept. 1 said he was under investigation.
Wharf Holdings Ltd. increased 3.4 percent to HK$62.75. New World gained 1.7 percent to HK$9.70, extending yesterday’s 3.3 percent advance on a rating upgrade by Morgan Stanley.
Convoy Financial rose 6.5 percent to HK$1.15 after saying it expects a “significant” increase in first-half profit from a year earlier.
Wing Hang will be delisted after OCBC raised its ownership to 97.52 percent, the two lenders said in statements yesterday, the last day of the $5 billion takeover offer.
Futures on the S&P 500 (SPX) added 0.2 percent today. The U.S. benchmark index yesterday slid 0.5 percent as President Barack Obama announced new sanctions against Russia and warned its action in Ukraine is “setting back decades of progress,” snuffing out earlier gains led by telephone stocks.
The Federal Reserve is expected to reduce its stimulus program for the sixth time and debate the timeline for interest-rate increases at a two-day meeting that ends today. Data on U.S. second-quarter gross domestic product is also due today.
Brokerages declined. First Shanghai slipped 3.7 percent to HK$1.31. Shenyin Wanguo HK Ltd., which surged 48 percent since July 17 through yesterday, retreated 3.7 percent to HK$4.48.
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