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Hong Kong Stocks Advance Amid Signs of Global Recovery

Feb. 20 (Bloomberg) -- Hong Kong stocks rose, with the city’s benchmark index heading for its first advance in three days, amid signs the global economy is improving.

Hutchison Whampoa Ltd., a port operator and owner of retail chains that gets more than half of its sales from Europe, added 1.2 percent before a report today that may show European consumer confidence improved. Sa Sa International Holdings Ltd. jumped 7.9 percent as Hong Kong’s biggest cosmetics retail-chain operator said same-store sales increased 20 percent during the week of Lunar New Year. PetroChina Co., Asia’s No. 1 oil producer, rose 2.9 percent after UBS AG raised the stock’s rating to buy.

The Hang Seng Index gained 0.7 percent to 23,307.41 as of the 4 p.m. close in Hong Kong, with almost three shares rising for each that fell. The gauge fell 1.8 percent drop this month, the third-worst performer among the world’s developed equity markets, according to data compiled by Bloomberg.

“The fundamentals for the Hong Kong market are still pretty good,” said Yoji Takeda, who oversees about $1.2 billion as Hong Kong-based head of Asian equities at RBC Investment Management (Asia) Ltd. “Investors are waiting for policies from the new Chinese government and that shouldn’t disappoint. I don’t see that much risk. Europe looks more stable.”

The measure had advanced the past five months, the longest such streak since July 2009, amid signs of economic recovery in China and the U.S.

The European Commission may say today its index of consumer confidence rose after a report yesterday showed economic sentiment in Germany increased to the highest level in almost three years.

China FDI

Trading volume on the Hang Seng Index was 5.8 percent below the 30-day average, according to data compiled by Bloomberg. The Hang Seng China Enterprises Index of mainland companies increased 1.4 percent to 11,683.04.

Companies that do business in Europe advanced. Hutchison Whampoa added 1.2 percent to HK$86.80. Yue Yuen Industrial (Holdings) Ltd., a maker of shoes for Nike Inc. and Adidas AG, climbed 1.7 percent to HK$27.60. Cosco Pacific Ltd., which operates a port in Greece, gained 1 percent to HK$12.58.

Sa Sa International jumped 7.9 percent to HK$8.18, a record close. Same-store sales increased 20 percent during the Lunar New Year holiday from Feb. 10 through Feb. 16 compared to the year earlier, while total sales rose 30 percent, the company said yesterday.

PetroChina climbed 2.9 percent to HK$10.74. UBS AG raised its rating to buy from neutral, while Barclays Plc reiterated its overweight rating, saying the company will benefit from natural-gas pricing reforms in China.

Brilliance, Dongfeng

Brilliance China Automotive Holdings Ltd., the partner of Bayerische Motoren Werke AG in China, climbed 2.6 percent to HK$11.28 after Sanford C. Bernstein Co. initiated coverage with an outperform rating, citing growing demand for premium passenger cars in the world’s biggest automotive market.

Dongfeng Motor Group Co., the Chinese partner of Nissan Motor Co. and Honda Motor Co., added 0.9 percent to HK$11.84. Bernstein rated the stock an outperform, citing improving sales volumes.

AIA Group Ltd., the third-biggest Asia-based insurer, rose 2.1 percent to HK$32.25, a record close. The company is expected to report on Feb. 27 a full-year net income of $2.6 billion, compared with $1.6 billion a year ago, according to the average estimate by 11 analysts tracked by Bloomberg.

Futures on the Hang Seng Index expiring this month added 0.3 percent. The HSI Volatility Index slid 3.9 percent to 14.15, indicating traders expect a swing of about 4.1 percent during the next 30 days.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net

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

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