Hong Kong Stocks Rise on China Stimulus Speculation, Home Sales

Hong Kong stocks rose after weaker Chinese service data fanned speculation policy makers will take steps to boost the world’s second-largest economy and as the city’s biggest realtor forecast rising home sales.

New World Development Co., the property company controlled by the family of billionaire Cheng Yu-tung, gained 1.3 percent after realtor Midland Holdings Ltd. predicted developers will sell the most homes this month in six years. Cathay Pacific Airways Ltd. rose 3 percent after an industry group boosted its estimate for carrier earnings this year. Winsway Coking Coal Holdings Ltd. tumbled 6.6 percent after Aluminum Corp. of China Ltd. dropped plans to buy a stake in the company.

The Hang Seng Index rose 0.2 percent to close at 20,888.28 after reopening from a two-day holiday. The Hang Seng China Enterprises Index of mainland firms fell less than 0.1 percent to 9,828.22. China’s markets will be closed through Oct. 5.

“China will introduce additional stimulus measures in their own time,” said Khiem Do, Hong Kong-based head of multi-asset strategy at Baring Asset Management (Asia) Ltd., which oversees about $8 billion. “China’s economy is decelerating and will probably achieve a soft landing.”

China Non-Manufacturing

About five shares rose for every four that fell on the Hang Seng Index today, with trading volume 7.9 percent below the 30-day average. The gauge gained 7.2 percent for the quarter ended September, while the Hang Seng China Enterprises Index fell about 1.1 percent this year through Sept. 28 on concern China’s government isn’t easing policy fast enough to counter the economic slowdown.

China’s non-manufacturing industries expanded at the weakest pace since at least March 2011, a report today showed. The purchasing managers’ index fell to 53.7 from 56.3 in August, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing. Readings above 50 indicate expansion.

Hong Kong real-estate companies may sell more than 3,300 units from eight new projects in October, according to Buggle Lau, chief analyst at Midland Holdings, the city’s biggest publicly traded realtor. That would be the highest monthly figure since August 2006, Lau said.

Developers Gain

New World, this year’s best performer in Hong Kong’s benchmark property gauge, advanced 1.3 percent to HK$12.18. Wharf Holdings Ltd., the Hong Kong builder expanding in at least 14 other Chinese cities, increased 0.8 percent to HK$54.30. Cheung Kong Holdings Ltd., the developer controlled by Li Ka-shing, Hong Kong’s richest man, rose 1.9 percent to HK$115.90.

Cathay Pacific Airways climbed 3 percent to HK$13 after the International Air Transport Association said airlines will earn $4.1 billion in 2012, $1.1 billion more than an earlier estimate.

Among stocks that fell, Winsway Coking dropped 6.6 percent to 99 Hong Kong cents. Aluminum Corp. of China, the nation’s No. 1 supplier of the metal, said Sept. 28 an agreement to buy a 30 percent stake in Winsway was terminated because of opposition from governments and regulators.

AAC Technologies Holdings Inc., which supplies speakers for Apple Inc.’s iPhone, retreated 3.9 percent to HK$26.90 after Fortune CLSA Securities Ltd. cut its rating on the stock to outperform from buy. Shares fell a fourth day after sales of the new iPhone were limited by production constraints.

S&P Futures

Futures on the S&P 500 fell 0.1 percent today. The index added 0.1 percent in New York yesterday as a rebound in Apple overshadowed disappointment after Spanish Prime Minister Mariano Rajoy said a bailout request is not imminent. Spanish regional presidents met in Madrid yesterday after Economy Minister Luis de Guindos said the nation is pressing on with its analysis of whether to seek a bailout.

The Hang Seng Index traded at 11 times estimated earnings, compared with 9.7 for the Shanghai Composite Index and 14 for the S&P 500.

Futures on the Hang Seng Index dropped 0.1 percent to 20,863 today. The HSI Volatility Index gained 6.7 percent to 16.31, indicating traders expect a swing of 4.7 percent in the equity benchmark in the next 30 days.

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