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Hong Kong H-Shares Cap Biggest Weekly Advance Since 2011

Nov. 22 (Bloomberg) -- Hong Kong stocks rose, with a measure of Chinese companies capping its biggest weekly gain since December 2011, as insurers led the advance. Glorious Property Holdings Ltd. soared by a record on a buyout offer from its largest shareholder.

Ping An Insurance (Group) Co. rose 3 percent to lead gains on the Hang Seng Index after HSBC Holdings Plc said China’s insurers will outperform next year. Yanzhou Coal Mining Co. jumped 3.2 percent on higher prices for the fuel as energy companies advanced. China Galaxy Securities Co. led brokerages higher after the China Securities Journal said the government may allow foreign investors to take larger stakes in the industry. Shanghai Fosun Pharmaceutical Co. pared losses after its parent company denied its chairman was arrested.

The Hang Seng China Enterprises Index, also known as the H-share index, added 1 percent to 11,448.74 at the close in Hong Kong, capping a 7 percent weekly advance. The Hang Seng Index climbed 0.5 percent to 23,696.28, with twice as many stocks climbing as falling on the 50-member gauge on volume 8.8 percent higher than the 30-day average.

“The Hong Kong market is still relatively strong,” said Jackson Wong, vice president of Hong Kong-based brokerage Tanrich Securities Co. “The main focus in the last few days has been coal prices in China and financial reforms.”

The H-share index climbed 29 percent from this year’s low on June 25 on signs of recovery in China and after policy makers unveiled the biggest reform package since the 1990s. The Hang Seng Index is up 20 percent from its June low, and traded at 11.31 times estimated earnings, compared with 16.2 for the Standard & Poor’s 500 Index yesterday.

Insurers Jump

Ping An Insurance climbed 3 percent to HK$73.15. China Pacific Insurance (Group) Co. gained 2.9 percent to HK$31.50. China Life Insurance Co., the nation’s biggest insurer, rose 2.7 percent to HK$25. The sector will benefit next year from improving business quality and fewer regulatory headwinds, according to a report from HSBC.

Yanzhou Coal advanced 3.2 percent to HK$8.63, the biggest gain on the H-share gauge. China Shenhua Energy Co. gained 1.9 percent to HK$26.65. The shares extended gains after benchmark Qinhuangdao coal price increased to a three-month high, data from the China Coal Transport & Distribution Association showed this week.

Futures on the S&P 500 were little changed today. The gauge yesterday climbed 0.8 percent as jobless claims fell to the lowest since September. The Dow Jones Industrial Average topped 16,000 for the first time. The Federal Reserve has said it needs to see sustained improvement in the labor market before tapering record stimulus.

Glorious Property

Glorious Property Holdings surged 33 percent to HK$1.65 after it resumed trading today. The developer said Zhang Zhirong, the biggest shareholder, will buy all outstanding stock for as much as HK$4.57 billion ($589 million) and delist the company after the deal is completed. His offer represents a 45 percent premium to the last traded price of HK$1.24.

China Galaxy Securities jumped 4.2 percent to HK$6.41, while Haitong Securities Co. increased 1.3 percent to HK$12.94. China may expand businesses allowed for joint-venture brokerages and offer more policy support for cross-border businesses, the China Securities Journal reported, citing an unidentified person.

Among stocks that fell, Shanghai Fosun slid 5.7 percent to HK$19.42, paring a loss of as much as 13 percent after parent Fosun International Ltd. said rumors that Chairman Guo Guangchang had been detained were “unfounded.” Fosun International dropped 4.3 percent to HK$7.13.

Retail Shares

Golden Eagle Retail Group Ltd., a Chinese department store operator, slumped 7.9 percent to HK$10.22. Brokers may cut sector estimates after Parkson Retail Group Ltd.’s third-quarter earnings showed operating costs are rising, UBS AG said in a note. Parkson dropped 3.6 percent to HK$2.65 after its profit fell.

Futures on the Hang Seng Index rose 0.6 percent to 23,734. The Hang Seng Volatility Index declined 0.8 percent to 16.96, indicating traders expect the benchmark equity index to swing 4.9 percent 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: Sarah McDonald at smcdonald23@bloomberg.net

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