Hong Kong’s benchmark stock index rose, paring this week’s drop, after U.S. jobless claims fell, fueling optimism of a global economic recovery. Developers fell after Xinhua News Service reported China will act to further contain speculation in the property market.
Techtronic Industries Co., maker of Hoover vacuum cleaners and Ryobi power tools, advanced 3.6 percent. China Overseas Land & Investment Ltd., controlled by the nation’s construction ministry, slid 1.2 percent. Biostime International Holdings Ltd., a provider of pediatric nutrition and baby-care products, slumped 5.1 percent on its debut.
The Hang Seng Index advanced 0.2 percent to close at 22,714.85, after falling as much as 0.7 percent. Twenty-one stocks rose while 20 fell on the 45-member gauge, which dropped 1.9 percent this week.
“Some investors are locking in gains running to year end,” said Andrew Sullivan, director of institutional sales at OSK Securities Hong Kong Ltd. China “will watch the effect of the current measures before moving to change things. The next curb on property is likely to be a unit tax,” he said.
China raised interest rates in October, and has boosted bank reserve requirements five times this year, including once last week, as it seeks to curb a bubble in property prices. With inflation accelerating to the fastest pace in 28 months in November, Australia & New Zealand Banking Group Ltd.’s economist Liu Li-Gang predicted more rate increases before the end of this year.
The Hang Seng China Enterprises Index of so-called H shares of Chinese companies gained 0.3 percent to 12,468.88.
The Hang Seng Index has recovered 20 percent from this year’s low reached on May 25 on speculation that growth in corporate earnings will overcome concerns about the pace of the U.S. economic recovery and China’s steps to curb rising property prices. Shares in the gauge trade at an average 14.3 times estimated earnings, compared with 12.7 times on May 25.
Techtronic advanced 3.6 percent to HK$10.20. Li & Fung Ltd., the biggest supplier to Wal-Mart Stores Inc., rose 1.2 percent to HK$43.80.
Applications for unemployment benefits in the U.S. fell by 3,000 to 420,000 last week, sending the average over the past four weeks to the lowest level since August 2008, according to the Labor Department. Other reports showed U.S. builders began work on a greater number of homes in November for the first time in three months, and manufacturing picked up in the Philadelphia region in December.
China Property Measures
China Overseas Land slid 1.2 percent to HK$14.58. KWG Property Holding Ltd., a mainland Chinese developer, fell 1 percent to HK$5.98. Guangzhou R&F Properties Co., the biggest builder in the southern Chinese city, slipped 0.2 percent to HK$10.64.
China will strengthen controls in the real-estate market and curb speculative investment from next year through 2015, Xinhua reported late yesterday, citing China’s Ministry of Housing and Urban-Rural Development.
Biostime slipped 5.1 percent to HK$10.44 on its first day of trading.
Sino-Ocean Land Holdings Ltd., a Beijing-based developer, gained 6.1 percent to HK$5.39. Cosco International Holdings Ltd., an investor in real estate and shipping services, said it will raise a net HK$5.23 billion ($673 million) selling shares in Sino-Ocean Land. Cosco announced the share-sale plan Sept. 10, and its shareholders approved the disposal that month. Cosco rose 3.4 percent to HK$4.85.
Gome Electrical Appliances Holdings Ltd., China’s second-biggest electronics retailer, surged 8.1 percent to HK$3.08 after saying shareholders approved the appointment of billionaire founder Huang Guangyu’s representatives to the company board.
AIA Group Ltd., American International Group Inc.’s Asian division, rose 2.1 percent to HK$22.35. Mark Tucker, chief executive officer of AIA Group, is seeking to make AIA the biggest company on the Hong Kong stock exchange from its current position of “10th or 11th,” he told Sky News in an interview.
Futures on the Hang Seng Index gained 0.5 percent to 22,672.