Hong Kong stocks rose for the first time in three days with developers leading the advance after Daiwa Capital Markets H.K. Ltd. said it didn’t foresee any further curbs on the property market.
China Overseas Land & Investment Ltd., the biggest Hong Kong-listed mainland developer by market value, rose 2.9 percent. Sands China Ltd., the Asian unit of Sheldon Adelson’s Las Vegas company, lost 4.9 percent after saying second-quarter net income fell 40 percent from last year. Xingye Copper International Group Ltd., a Chinese producer of copper products, lost 1.2 percent after saying it expected a “significant” decline in first-half profit.
The Hang Seng Index advanced 0.1 percent to 18,892.79 at the close of trading in Hong Kong, reversing earlier losses of as much as 0.5 percent. About five companies climbed for every four that fell on the 49-member gauge. The Hang Seng China Enterprises Index of mainland companies lost 0.1 percent to 9,210.92.
“Investors generally want to be optimistic,” said Marco Li, Hong Kong-based portfolio manager at Manulife Asset Management, which oversees $208 billion globally. “The major focus is earnings, if you can get some large weights saying the outlook is improving, that will turn the market higher.”
The benchmark Hang Seng Index fell 13 percent from this year’s high in February through today on signs Europe’s debt crisis is worsening while growth slows in China and the U.S. The value of shares on the gauge was 9.9 times estimated earnings on average, compared with 13 for the Standard & Poor’s 500 Index and 10.6 for Stoxx Europe 600 Index.
Stocks fell earlier after the International Monetary Fund’s China representative said the country may have already done enough to support economic growth, Il Houng Lee, the IMF’s senior resident representative in the country, said in an interview yesterday.
Most mainland developers rose after Daiwa analysts said they expected the Chinese government to further encourage demand for property by owner-occupiers.
“We are seeing real demand by people wanting to buy flats,” said Francis Lun, managing director at Lyncean Holdings Ltd., a Hong Kong-based brokerage. “End users are supporting the property market in China, not speculators.”
China Overseas Land rose 2.9 percent to HK$17.48. China Resources Land Ltd., a state-controlled mainland developer, rose 0.8 percent to HK$14.86. Shimao Property Holdings Ltd., controlled by billionaire Hui Wingmau, gained 2.5 percent to HK$10.88.
Sands China lost 4.9 percent to HK$21.15, its lowest close since December. The company reported a 40 percent drop in second-quarter profit as high-stake gamblers cut back on spending in Macau, the world’s largest gaming hub.
Xingye Copper lost 1.2 percent to 80 Hong Kong cents after saying it expected a “significant” drop in first-half profit as prices for copper products declines.
Almost half of the companies on the Hang Seng Composite Index that have already reported earnings have underperformed estimates.
Ajisen (China) Holdings Ltd., an operator of Japanese-style noodle restaurants in China, fell 3.9 percent to HK$4.93, its lowest close since July 2009, after saying it expected a “significant” decline in interim income.
Zijin Mining Group Co. Ltd., China’s largest gold producer, gained 2.2 percent to HK$2.34 as the bullion rose for a third day reaching a three-week high. Zhaojin Mining Industry Co. Ltd., a gold mining company in eastern China, advanced 3.4 percent to HK$9.12.
Futures on the Hang Seng Index rose 0.1 percent to 18,825. The HSI Volatility Index lost 4.2 percent to 21.78, indicating traders expect a swing of about 6.2 percent in the benchmark index during the next 30 days.