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Hong Kong Stocks Gain in Low Trading Volume as Automakers Climb

Feb. 15 (Bloomberg) -- Hong Kong stocks rose in trading volume below two-thirds the daily average for the benchmark gauge, before China’s markets reopen next week and as automakers climbed.

Geely Automobile Holdings Ltd., a unit of the Chinese owner of Volvo Cars Corp., jumped 7.7 percent, extending yesterday’s gain after its January sales volume swelled. Sands China Ltd., a Macau casino operator, rose 2.7 percent amid increasing tourist arrivals to the city. Esprit Holdings Ltd., a clothier that gets more than three-quarters of its revenue from Europe, dropped 1.2 percent amid signs that region’s economy is slowing.

The Hang Seng Index rose 0.1 percent to 23,444.56, its highest close since Feb. 4, after swinging between gains and losses more than 20 times. The gauge rose 1 percent for the week, which was shortened to two trading days by the Lunar New Year holidays. About five stocks dropped for every four that rose as trading volume dwindled to 38 percent less than the 30-day average, according to data compiled by Bloomberg.

The Hang Seng China Enterprises Index of mainland companies increased 0.2 percent to 11,845.20. China’s markets are closed today and will reopen on Feb. 18 after a week-long holiday.

“We still have to wait for traders and investors to come back to the market,” said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. “For today, people may be waiting for the reopening of the mainland markets. Overall for Hong Kong, the market is becoming more stable because the index had a short-term correction before the holiday.”

Chinese Developers

The Hang Seng Index last week dropped 2.1 percent, its biggest weekly decline since November, as Chinese property developers sank on concern the government will introduce more curbs on property. The gauge soared 22 percent from the end of August through January, a surge prompted by signs of economic recovery in the U.S. and China, and by stimulus added by central banks to boost growth.

The Hong Kong gauge traded at 11.4 times average estimated earnings yesterday, compared with 13.7 for the Standard & Poor’s 500 Index and 12.4 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.

Geely jumped 7.7 percent to HK$4.64. Car sales volume in January increased 67 percent from a year earlier, the company said yesterday. BYD Co., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., surged 7.2 percent to HK$32.10, while Dongfeng Motor Group Co., which makes vehicles with Nissan Motor Co., increased 2.7 percent to HK$12.38.

Tourists Boost Casinos

Sands China rose 2.7 percent to HK$37.50, and Wynn Macau Ltd., the Hong Kong-listed casino unit of Wynn Resorts Ltd., advanced 1.2 percent to HK$21 after the Macau Government Tourist Office said visits from mainland China rose 17 percent on Feb. 14, from the equivalent Lunar New Year day one year earlier.

Hong Kong Exchanges & Clearing Ltd., the world’s largest exchange company by market value, rose 1.5 percent to HK$147.90 after saying it received regulatory approval to start after-hours futures trading and will begin the service on April 8.

New China Life Insurance Co. climbed 3.4 percent to HK$31.85, People’s Insurance Co. gained 1.7 percent to HK$4.77 and Greentown China Holdings Ltd., a Hong Kong-based developer, rose 2.7 percent to HK$15.80, extending yesterday’s gains after MSCI Inc. said on Feb. 13 the stocks will be added to its China index as of the close of Feb. 28.

S&P Futures

Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The gauge yesterday climbed 0.1 percent to a five-year high as a drop in jobless claims and Warren Buffett’s deal for H.J. Heinz Co. overshadowed concern over shrinking economies in Europe and Japan.

Esprit dropped 1.2 percent to HK$10.12 while Cosco Pacific Ltd., which operates a port in Greece, fell 0.5 percent to HK$12.84.

Gross domestic product in the euro area shrank in the fourth quarter, slipping 0.6 percent from the previous three months, the European Union’s statistics office in Luxembourg said yesterday. That’s the worst performance since the first quarter of 2009.

Gold producer Zhaojin Mining Industry Co. slid 1.1 percent to HK$11.02 as the price of the precious metal dropped to the lowest level in six weeks.

Futures on the Hang Seng Index were little changed at 23,423. The HSI Volatility Index slid 0.9 percent to 14.14, indicating traders expect a swing of 4.1 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: John McCluskey at j.mccluskey@bloomberg.Net

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