Hong Kong Stocks Rise as Commodity Shares Gain on Prices; Cnooc Advances
Hong Kong stocks advanced for the first time in three days as shares of raw material producers rose after commodity prices increased yesterday and gold climbed to a record.
Cnooc Ltd., China’s biggest offshore oil producer, rose 1.1 percent. Zijin Mining Group Co., China’s largest gold producer, advanced 4.1 percent. Xinjiang Goldwind Science & Technology Co., a China-based maker of wind turbines, surged 7.6 percent after winning 5.7 billion yuan ($857.5 million) of supply contracts in China. Foxconn International Holdings Ltd., the world’s No. 1 contract maker of mobile phones, climbed 3 percent after President Barack Obama said he’ll agree to Bush-era tax cuts.
“Obama extending tax cuts should help support the economic recovery,” said Terrace Chum, who helps manage about $6 billion at MFC Global Investment Management in Hong Kong. “Investors are still mindful of policy tightening for China. That will set the tone for the market.”
Hong Kong’s Hang Seng Index climbed 0.8 percent to 23,428.15 as of the 4 p.m. local time close, erasing losses of as much as 0.6 percent earlier. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies rose 0.9 percent to 12,922.24.
The Hang Seng Index has increased 7.1 percent this year, on expectations that growth in corporate earnings will overcome concerns about the pace of the U.S. economic recovery and China’s steps to curb rising property prices. Shares in the gauge trade at an average 14.7 times estimated earnings, compared with about 17.2 times at the start of the year.
U.S. Tax Cuts
Shares of raw material producers advanced after crude oil for January delivery rose 0.2 percent to settle at $89.38 a barrel in New York yesterday on speculation the U.S. may extend stimulus measures, bolstering fuel demand in the world’s largest oil-consuming country. Copper futures climbed 0.5 percent in London yesterday, while gold rose to an all-time high of $1,427.55 an ounce in New York.
Cnooc increased 1.1 percent to HK$18.36. Jiangxi Copper Co., China’s biggest producer of the metal increased 2.4 percent to HK$25.25. Zijin Mining jumped 4.1 percent to HK$7.59. Real Gold Mining Ltd. gained 2.2 percent to HK$14.94.
Xinjiang Goldwind surged 7.6 percent to HK$18.34. The company said it won contracts valued at 920.1 million yuan to supply wind-turbine electricity generators to China Three Gorges New Energy Corp. That’s in addition to contracts worth 4.77 billion yuan for eight other wind-turbine projects in China.
Exporters advanced after Obama said he would accept a lower rate for the estate tax than Democrats wanted in order to break a stalemate over extending the George W. Bush administration’s tax cuts before Congress adjourns. The current tax rates, enacted in 2001 and 2003, are set to expire Dec. 31. “This compromise is an essential step on the road to recovery,” Obama said.
Foxconn increased 3 percent to HK$5.77. Cosco Pacific Ltd., Asia’s third-largest container-terminal operator, jumped 3.9 percent to HK$13.30.
“Valuations have become attractive following the decline in November,” said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. “Prospects of further quantitative easing in the U.S. and tax cuts in the U.S. are positive for Hong Kong stocks.”
Tsingtao Brewery Co., the Chinese beer company founded by German settlers more than a century ago, advanced 5 percent to HK$42.95. The company said it will acquire Shandong Xin Immense Brewery Co. for 1.87 billion yuan.
Hong Kong Rents
Commercial property landlords in Hong Kong gained amid prospects of rising rents in the Chinese city. Prime office rents will rise as much as 35 percent in 2011 because of increased demand and limited supply, Gavin Morgan, head of markets at Jones Lang LaSalle Inc. said at a media briefing today.
Wharf (Holdings) Ltd., the owner of Times Square and Harbour City shopping malls and office complexes in the city, surged 5.8 percent to HK$58. Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, gained 1.5 percent to HK$131.50.
Three stocks advanced for each that fell in the 45-company Hang Seng Index. Futures on the gauge climbed 1.2 percent to 23,459.
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