Hong Kong stocks rose, with the benchmark equity index capping its longest winning streak in three weeks, as developers and financial shares advanced. Coal producers gained amid speculation prices may bottom.
China Resources Land Ltd., the second-largest mainland developer traded in Hong Kong, jumped 6 percent. China Minsheng Banking Corp., the nation’s first non-state lender, gained 5.3 percent after Citic Securities Co. said banking shares may rise. China Coal Energy Co., the country’s second-largest producer of the fuel, jumped 6.9 percent as coal miners extended last week’s gains.
The Hang Seng Index advanced 1.2 percent to 22,541.13 at the close in Hong Kong, capping its longest winning streak since July 24. Volume was 64 percent higher than the 30-day average. The Hang Seng China Enterprises Index increased 2.6 percent to 10,185.55, completing the biggest four-day advance since December 2011. Shares continued to rally after reports last week suggested mainland growth was stabilizing.
“Better-than-expected economic data aroused interest for foreign funds that were oversold in China shares,” said Ben Kwong, chief operating officer at KGI Asia Ltd. Gains by developers are “reasonable because investors know it’s not in the government’s interest to significantly depress the property market.”
The Hang Seng Index retreated 0.5 percent this year, the only decline among developed markets tracked by Bloomberg, amid concern China’s growth is slowing and speculation the Federal Reserve will pare record stimulus. The gauge traded at 10.75 times estimated earnings, compared with 15.31 for the Standard & Poor’s 500 Index.
A measure of property stocks had the biggest gain among the Hang Seng Index’s industry groups. China Resources Land surged 6 percent to HK$23.95. KWG Property jumped 8.9 percent to HK$5 after the mainland builder posted a 49 percent jump in first-half profit.
Developers rallied after the government stoked speculation it may ease fundraising curbs on real estate companies. The China Securities Regulatory Commission issued a statement last week elaborating on conditions for allowing financing by developers, prompting analysts to say restrictions may be relaxed.
The three-year campaign by Chinese authorities to rein in speculation includes tighter down-payment requirements, bans on second-homes purchases, and testing property taxes in certain cities. Developers haven’t been allowed to sell shares in China since 2010, according to Zheshang Securities Co.’s Dai Feng.
“It comes down to people being more confident that China is not trying to deflate the property market but regulate it and prevent a speculative bubble via property tax trials,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong. Earnings by companies including KWG Property are also boosting the sector, he said.
Lenders led gains among mainland shares listed in Hong Kong, also known as H-shares. China banking stocks may rise 20 percent as concerns on economic growth and financial risks, recede, according to a Citic Securities report.
China Minsheng climbed 5.3 percent to HK$8.52, while Agricultural Bank of China Ltd., the nation’s No. 3 lender, advanced 5.6 percent to HK$3.42.
Stocks rose on Aug. 9 as China’s industrial output beat estimates and consumer prices rose less than expected last month, encouraging signs to investors after a two-quarter slowdown in economic growth. Separate data showed China’s trade data beat expectations.
China Coal Energy jumped 6.9 percent to HK$5.15. China Shenhua Energy Co., the nation’s top coal miner by market value, gained 4.5 percent to HK$25.60. The nation’s prices for the fuel may bottom, boosting stocks, Morgan Stanley said in a note dated yesterday.
Materials and energy companies led declines this year on the Hang Seng Composite Index amid concern weaker expansion in China will sap demand. Utility and information-technology shares were the biggest gainers.
Futures on the S&P 500 rose 0.3 percent today. The benchmark gauge slid 0.1 percent in New York yesterday after Japan’s economic expansion missed estimates and investors awaited today’s U.S. retail data for hints on when the Fed will curtail bond buying. Sales probably rose 0.3 percent for a fourth month of gains, according to a Bloomberg survey.
Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., gained 1.4 percent to HK$10.54. The company announced after the close that first-half profit rose less than estimates.
Wynn Macau gained 5 percent to HK$21.90. Sands China Ltd., a unit of billionaire Sheldon Adelson’s Las Vegas company, increased 3.4 percent to HK$44.40. Macau’s casino revenue may rise 14 percent to 16 percent in August, RBC Capital wrote in a note dated yesterday.
Hang Seng Index futures rose 1.6 percent to 22,549. The HSI Volatility Index slid 1.2 percent to 16.16, indicating traders expect the equity benchmark to swing 4.6 percent in the next 30 days.