Hong Kong's Equities Rise; Developers Gain on Poly Sales, Chalco Advances
Hong Kong stocks rose, halting four days of losses, as Chinese developers gained after reporting higher sales, and after Central Huijin Investment Ltd. agreed to take up a Bank of China Ltd. rights offer.
China Resources Land Ltd., a state-controlled developer, advanced 3.5 percent. Poly (Hong Kong) Investment Ltd. surged 4.3 percent after the mainland developer said contracted sales in the first half rose. Bank of China, the nation’s third- largest bank by market value, climbed 1.8 percent. Aluminum Corp. of China Ltd. jumped 4.9 percent after saying it extended the deadline for a planned sale of yuan-denominated shares. The stock’s 30 percent drop this year made it the second-worst performer on the Hang Seng Index.
The Hang Seng Index climbed 1.2 percent to close at 20,084.12, rebounding from its longest losing streak in two months. The gauge, which swung between gains and losses at least 11 times, declined as much as 0.3 percent today.
“For the longer term, valuations are cheaper with the index down so much all this while,” said Khiem Do, Hong Kong- based head of multi-asset strategy at Baring Asset Management (Asia) Ltd., which oversees $10 billion. “China is a growing region, and its companies have balance sheets strong enough to support stock prices eventually.”
Shares on the benchmark measure are priced at an average 13.3 times estimated earnings, down from 18 times on Nov. 16, when the index hit its high for 2009, data compiled by Bloomberg show.
The Hang Seng China Enterprises Index of so-called H shares of Chinese companies increased 2.4 percent to 11,456.42, halting a nine-day, 7.8 percent drop.
China Resources Land advanced 3.5 percent to HK$14.86, halting a four-day, 7 percent slump. China Overseas Land & Investment Ltd., controlled by the nation’s construction ministry, rose 3 percent to HK$14.92.
Poly gained 4.3 percent to HK$8.07. The company said yesterday contracted sales in the first half rose 24 percent from a year earlier to 4.7 billion yuan ($694 million).
Glorious Property Holdings Ltd., a developer with properties from Shanghai to Harbin, climbed 1.8 percent to HK$2.24. The company’s contracted sales rose 34 percent to 4.2 billion yuan in the first half, the Standard reported, citing Chief Executive Officer Cheng Lixiong.
Bank of China advanced 1.8 percent to HK$3.99. The bank said its controlling shareholder, Central Huijin, will take up its full entitlement in the forthcoming rights offer.
Chalco, as China’s biggest producer of aluminum is known, advanced 4.9 percent to HK$5.99, the sharpest gain on the Hang Seng Index. The deadline for the share sale in China would be pushed back by a year from Aug. 23, the company said. Chalco had earlier won approval from the China Securities Regulatory Commission to sell as many as 1 billion shares.
Shares declined earlier as growth in Europe’s services and manufacturing industries slowed, heightening concerns that a global recovery may falter. The Hang Seng Index has dropped 8.2 percent this year as worries about budget deficits in Europe and tighter monetary policy in China dented confidence in the strength of the global economy.
Agricultural Bank of China Ltd., the nation’s biggest lender by customers, will likely price shares today in an initial public offering that may raise as much as $20.1 billion, two people with knowledge of the matter said. The IPO could potentially be the largest ever.
“Agricultural Bank of China’s IPO might have absorbed much liquidity,” said Danny Yan, a portfolio manager at Taifook Asset Management Ltd., which oversees $400 million.
Xtep International Holdings Ltd., a sportswear maker, slumped 5.7 percent to HK$5.68 after UBS AG cut its rating on the stock to “neutral” from “buy.”
Futures on the Hang Seng Index gained 1.3 percent to 20,028. More than seven stocks advanced for each that fell among the measure’s 43 constituents.