Hong Kong Stocks Advance After Chinese Data Beat Estimate

Nov. 11 (Bloomberg) -- Hong Kong stocks rose, with the city’s benchmark index heading for its first advance in six days, after China’s industrial production increased more than expected as the Communist Party meets to discuss reforms.

Industrial & Commercial Bank of China Ltd., the nation’s biggest lender, jumped 2.7 percent. Yashili International Holdings Ltd. surged 17 percent after five buyers including a unit of Temasek Holdings Pte. agreed to buy HK$1.65 billion ($213 million) of the dairy maker’s shares. Guangzhou Automobile Group Co. climbed 2.1 percent, pacing gains among Chinese carmakers after mainland vehicle sales increased.

The Hang Seng Index rose 1.4 percent to close at 23,069.85, erasing losses as much as 0.3 percent. About six shares rose for each that fell on the gauge. The measure dropped 2.2 percent last week amid concern the Federal Reserve may cut stimulus sooner than expected. The Hang Seng China Enterprises Index advanced 1.9 percent to 10,582.90.

“We’re seeing some bargain hunting following last week’s decline,” Linus Yip, a strategist at First Shanghai Securities in Hong Kong, said by phone. “Investors are hoping the outcome of the meeting in China won’t disappoint. There’s expectations for some policy reforms in the financial sector.”

China Reforms

President Xi Jinping and Chinese Communist Party leaders tomorrow conclude a four-day gathering aimed at mapping out a blueprint for reform that includes reducing the government’s role in the economy and spurring foreign investment. Failure to implement changes on issues from interest rates to local government debt and land ownership may impede efforts to boost incomes and spur migration to the cities.

Industrial production in China rose 10.3 percent last month from a year earlier, the nation’s statistics bureau said Nov. 9, exceeding the 10 percent median estimate in a Bloomberg survey of economists and accelerating from 10.2 percent in September. Inflation came in at 3.2 percent, below the 3.5 percent full-year government target. Economists projected price gains of 3.3 percent.

The Hang Seng Index has advanced 16 percent from this year’s low on June 24 amid signs China’s economy is stabilizing. Hong Kong’s benchmark index traded at 11 times estimated earnings today, compared with about 16 for the Standard & Poor’s 500 Index on Nov. 8.

Tapering Outlook

Futures on the S&P 500 fell 0.1 percent. The gauge climbed 1.3 percent on Nov. 8 in New York as a better-than-forecast jobs report signaled the economy may be strong enough to withstand a stimulus reduction. The Fed may start tapering in March, with analysts in a Bloomberg survey last week expecting monthly bond purchases to fall to $70 billion from $85 billion.

U.S. employers added 204,000 workers after a revised 163,000 gain in September that was larger than previously estimated, Labor Department figures showed Nov. 8 in Washington. The increase in payrolls topped the most optimistic forecast in a survey of economists.

Chinese lenders advanced. ICBC climbed 2.7 percent to HK$5.36. China Construction Bank Corp., the nation’s second-largest lender, increased 2.4 percent to HK$6.04. Agricultural Bank of China Ltd. gained 1.9 percent to HK$3.72.

Yashili jumped 17 percent to a record close of HK$4.24. A unit of Temasek Holdings and four other investors agreed to buy 471.1 million Yashili shares at HK$3.50 each from parent China Mengniu Dairy Co. to meet the minimum amount of stock required to be in circulation.

Chinese automakers gained as passenger-vehicle sales rose 24 percent from a year earlier to 1.61 million units in October, according to the China Association of Automobile Manufacturers today. That compares with the median estimate of 1.5 million units by three analysts surveyed by Bloomberg News.

Guangzhou Automobile Group, a partner of Toyota Motor Corp., climbed 2.1 percent to HK$9.35. Dongfeng Motor Group Co. added 1.1 percent to HK$11.40. BYD Co., the Chinese automaker part-owned by billionaire Warren Buffett’s Berkshire Hathaway Inc., rose 1.1 percent to HK$37.70.

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

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net