Hong Kong Stocks Caps Best Week Since September

Hong Kong stocks rose, with the Hang Seng Index capping its biggest weekly gain since September. China Rare Earth Holdings Ltd. jumped after a report that the nation will extend subsidies to the industry.

China Rare Earth rose 4.7 percent. China Resources Enterprise Ltd., the government-backed partner of SABMiller Plc., gained 2.5 percent after reporting an increase in sales. Developers gained as they lobbied the government to adjust a property tax targeted at overseas and corporate buyers, with the Hang Seng Property Index gaining 1.6 percent.

The Hang Seng Index rose 0.8 percent to 21,913.98 as of thr 4 p.m. local time close, with almost five stocks gaining for each that fell in the 49-member gauge. The measure capped a 3.6 percent increase this week. The Hang Seng China Enterprises Index of mainland companies listed in the city increased 1.1 percent to 10,606.99.

China “will be able to avoid a hard landing; we’ve seen a much further-than-expected rebound in manufacturing and exports,” Norman Chan, head of investment at Calibre Asset Management Ltd., a unit of National Australia Bank Ltd., said in a Bloomberg television interview in Hong Kong. “China is a very momentum-driven market and sometimes it takes a lot of government policies to drive a situation.”

A Chinese manufacturing index yesterday signaled the first expansion in 13 months, adding to signs that economic growth is rebounding after a seven-quarter slowdown. The preliminary reading was 50.4 for a purchasing managers’ index released by HSBC Holdings Plc and Markit Economics. It compares with a final level of 49.5 for October. A reading above 50 indicates expansion.

Sustained Pickup

Gains in manufacturing bolster prospects for a sustained pickup in economic growth that slowed last quarter to the weakest pace in more than three years. A rebound may smooth a once-a-decade leadership transition for the ruling Communist Party, set to install Xi Jinping as president and Li Keqiang as premier in March, and reduce the likelihood of additional monetary stimulus.

The Hong Kong government should exempt buyers of apartments costing more than HK$30 million ($3.9 million), and purchases by companies whose directors or shareholders are Hong Kong permanent residents, the Real Estate Developers Association of Hong Kong said in a statement today. The companies say the tax threatens the city’s “hard-earned” reputation as one of the world’s freest markets.

Wharf (Holdings) Ltd., which gets 67 percent of its revenue from the city, gained 3.6 percent to HK$57.60. China Resources Land Ltd., a state-controlled developer, gained 2.3 percent to HK$20.10.

Citic Pacific Ltd., building the world’s largest magnetite iron-ore mine, advanced 1.7 percent to HK$9.85 after it was granted an injunction to stop Mineralogy Pty Ltd. from terminating mining rights and site lease agreements in Australia.

Trading volume on the Hang Seng Index was about 13 percent below the 30-day intraday average for the time of the day, according to data compiled by Bloomberg. The gauge advanced 20 percent through yesterday from this year’s low on June 4 as economic data showed China’s slowdown may be bottoming and central banks around the globe added stimulus to spur growth.

U.S. Closed

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. Equity markets were closed yesterday for the Thanksgiving holiday.

“It is looking like a fairly subdued day,” said Cameron Peacock, Melbourne-based analyst at IG Market Ltd., a provider of trading services for equities, bonds and currencies.

Hong Kong’s benchmark Hang Seng Index traded at 11.5 times estimated earnings compared with 13.4 times for the Standard & Poor’s 500 Index and 12.3 times for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

The HSI Volatility Index slid 2.7 percent to 15.44, its lowest level in a month, indicating traders expect a 4.4 percent swing in the equity benchmark in the next 30 days. Futures on the Hang Seng Index rose 0.9 percent to 21,934.

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