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Hong Kong Stocks Rise Toward Weekly Gain on Policy Bets

Dec. 28 (Bloomberg) -- Most Hong Kong stocks rose, with the benchmark index posting its fifth weekly gain in six weeks, amid speculation China’s government will introduce measures to boost consumption.

Belle International Holdings Ltd., a women’s footwear maker, rose 3.1 percent. China Unicom (Hong Kong) Ltd., the nation’s second-largest mobile-phone company, advanced 1.3 percent. China Silver Group Ltd. jumped 18 percent on its first day of trading. Lenovo Group Ltd., a personal-computer maker, dropped 1.8 percent, erasing this month’s gains.

The Hang Seng Index climbed 0.2 percent to close at 22,666.59 in Hong Kong, taking the week’s increase to 0.7 percent. About two stocks advanced for each that fell on the 50-company measure, with volume 30 percent below the 30-day average, according to data compiled by Bloomberg. The Hang Seng China Enterprises Index of mainland companies rose 0.3 percent to 11,378.24.

“With China’s new leadership on board there’s some expectation in the market that they will reignite economic growth,” said Alex Au, managing director of Richland Capital Management Ltd. in Hong Kong, which oversees over $200 million. Fund flow into Hong Kong and improving sentiment has been helping the recent gains, Au said. “Some investors are still not convinced about the rally. After all, the global economy is still not in really good shape.”

Hong Kong’s benchmark index is headed for a 23 percent gain for the year, its biggest since 2009, amid signs China’s economy is improving and as central banks around the globe added stimulus to boost growth. Shares on the measure traded at 11.9 times average estimated earnings, compared with 13.7 for the Standard & Poor’s 500 Index and 12.8 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Belle, BYD

The Hang Seng Commerce and Industry Index advanced the most among the four industry groups in the Hang Seng Index today. Belle rose 3.1 percent to HK$16.88, while BYD Co., a maker of electric vehicles, advanced 4.1 percent to HK$22.70. China Unicom climbed 1.3 percent to HK$12.54.

China may adopt new measures to boost consumption, China Securities Journal reported, citing unidentified analysts. Separately, Shanghai Securities News reported China Ministry of Industry and Information Technology will introduce policies next year to develop a mobile internet and internet shopping and payment, citing Miao Wei, minister of the ministry.

China Silver Group surged 18 percent to HK$1.39 from its initial public offering price of HK$1.18.

Futures on the S&P 500 added 0.2 percent today after House Republicans announced the chamber will meet on Dec. 30 -- its first Sunday session in more than two years -- as lawmakers seek a budget deal before a year-end deadline. Unless a compromise is reached, more than $600 billion in automatic tax increases and spending cuts will come into effect starting in January.

Among stocks that fell, Lenovo declined 1.8 percent to HK$7.18. The stock surged 41 percent this year through yesterday. Chairman Yang Yuanqing sold 29 million shares at an average price of HK$7.04 each, cutting his stake in the company to 9.04 percent from 9.32 percent, Lenovo said in a filing to the Hong Kong stock exchange.

Futures on the Hang Seng Index were little changed at 22,659. The HSI Volatility Index rose 2.3 percent to 17.19, indicating traders expect a swing of 4.9 percent for the equity benchmark in the next 30 days.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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