Hong Kong stocks gained, with the Hang Seng Index rising the most in three weeks, as the city’s developers rose after residential sites sold yesterday for more than expected.
Sino Land Co., a Hong Kong developer controlled by billionaire Robert Ng, rose 2 percent. China Shenhua Energy Co., the nation’s largest coal producer, advanced 1.9 percent after the Securities Times said coal prices jumped to the highest in more than 2 1/2 years. Foxconn International Holdings Ltd., the world’s largest contract maker of mobile phones, slumped 3 percent on news it will be dropped from the benchmark index.
“Although the macro crosscurrents are making markets difficult to trade, it doesn’t feel like we’re really going to blow up from here,” said Christian Kielland, managing director of brokerage BTIG Hong Kong Ltd. “There are pockets of the market where there is strength, it’s just a matter of identifying them.”
The Hang Seng Index increased 0.9 percent to 23,276.27, the most since April 21. The gauge rose 0.5 percent for the week, its first weekly advance in three. All but three stocks gained in the 45-member gauge.
The Hang Seng China Enterprises Index of Chinese companies’ H shares advanced 0.8 percent to 12,894.13. In China, the benchmark Shanghai Composite Index rose the most in a month on speculation the government may limit interest-rate increases after announcing it will raise banks’ reserve requirements.
Sino Land rose 2 percent to HK$13.62 and Henderson Land Development Co., the builder controlled by billionaire Lee Shau-kee, rose 1.5 percent to HK$52.60. Cheung Kong (Holdings) Ltd., the developer controlled by billionaire Li Ka-shing, advanced 1.9 percent to HK$117.90.
Hong Kong’s government yesterday sold three residential sites for more than analysts predicted, boosting confidence that property curbs haven’t damped demand.
“We believe this sends a stronger positive sentiment signal than the previous land auction given the diversity of sites and buyers,” Credit Suisse Group AG said in a report dated today.
China Shenhua Energy advanced 1.9 percent to HK$34.85, and Yanzhou Coal Mining Co. rose 0.7 percent to HK$28.85. Coal prices at Qinhuangdao port, a benchmark in China, rose to the highest in more than two-and-half years as inventories of the fuel fell, Securities Times reported today, citing unidentified data. Coal prices rose by an average 5 yuan per metric ton in the week ended May 11, the newspaper said.
A measure of utilities had the biggest gain among the Hang Seng Index’s four industry groups. China Resources Power Holdings Co., the Hong Kong-listed mainland electricity producer, jumped 3.5 percent to HK$15.90, and Hong Kong and China Gas Co. increased 1.2 percent to HK$19.54.
“We are moving into the peak time for power utilization,” said BTIG Hong Kong’s Kielland. “With higher electricity demand and utilization rates expected to go higher, it’s likely that shares of certain independent power producers are going to move higher.”
Little Sheep Group Ltd., a restaurant operator, soared 25 percent to HK$6.14 after Yum! Brands Inc. offered to take the company private.
Through yesterday, the Hang Seng Index fell on all but one trading day since April 26 amid disappointing economic reports and concern China will take more steps to curb inflation. Shares in the gauge traded at an average 12.1 times forecast earnings yesterday, compared with 14.4 times at the end of last year, according to data compiled by Bloomberg.
Foxconn International slumped 3 percent to HK$4.26, the biggest drop in the benchmark, after Hang Seng Indexes Co. said the stock will be removed effective June 7. AIA Group Ltd. and Hengan International Group Co. will be added, it said. Hengan, a manufacturer of personal hygiene products, rose 2.9 percent to HK$65.35.
Futures on the Hang Seng Index rose 1.8 percent to 23,283. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, dropped 2.9 percent to 17.23, indicating options traders expect a swing of 4.9 percent in the Hang Seng Index in the next 30 days.
Contact the reporter on this story: Kana Nishizawa in Tokyo at +81-3-3201-8374 or email@example.com;