Hong Kong Stocks Gain on Economic Data, China Exporter Support
Hong Kong stocks (HSI) rose after U.S. and German economic data exceeded analysts’ forecasts and Spain beat a bill-sale target, boosting confidence in the outlook for the global economy. Chinese shares gained after Premier Wen Jiabao pledged to support exporters and small companies.
Techtronic Industries Co. (669), a maker of power tools that gets more than 70 percent of its revenue from North America, jumped 5.8 percent after payrolls increased in 29 U.S. states. HSBC Holdings Plc (HSBA), Europe’s biggest lender by market value, rose 2.5 percent. PetroChina Co., a mainland crude oil producer, jumped 3.4 percent and Minmetals Resources Ltd., a copper and alumina producer, jumped 6 percent after commodity prices rose.
The Hang Seng Index rose 1.9 percent to 18,416.45 at the close, the biggest advance in almost three weeks. All but three stocks gained in the 48-member gauge. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong gained 2.2 percent to 9,950.71.
“If you are bearish you have plenty of reasons to be bearish, but we are still going up today, and I think things are changing in a better way,” said Alex Wong, asset-management director at Ample Capital Ltd. in Hong Kong. Economic data from the U.S., bond sales in Europe, China’s easing monetary policy and support for exporters are positive changes, he said. Given the recent levels and the potential for the upside, “if you take it from a betting perspective, it’s actually more favorable for the bull.”
The Hang Seng Index fell 20 percent this year as banks and developers declined on China’s measures to curb inflation and property prices. Concern Europe will fail to contain its debt crisis also dragged on shares. Companies in the gauge traded at 10 times forecast earnings, down from 14.4 times on Dec. 31, according to data compiled by Bloomberg. The Standard & Poor’s 500 Index (SPXL1) trades at 12.6 times.
Techtronic jumped 5.8 percent to HK$7.80. Li & Fung Ltd. (494), a Wal-Mart Inc. supplier that gets more than half of its revenue from the U.S., rose 1 percent to HK$14.56. HSBC gained 2.5 percent to HK$59.15, while Cosco Pacific Ltd., which operates container facilities in Greece, gained 4.8 percent to HK$9.
Futures on the Standard & Poor’s 500 Index rose 0.5 percent today. The index advanced 3 percent in New York yesterday after a report showed builders broke ground in November on 685,000 houses, the most since April 2010 and exceeding the highest estimate of economists surveyed by Bloomberg News.
Separately, payrolls increased in 29 states in November, while the jobless rate declined in 43, figures from the U.S. Labor Department showed.
“The U.S. economic outlook is getting brighter, and you get a sense that the economy is recovering gradually,” said Hiroichi Nishi, an equities manager in Tokyo at SMBC Nikko Securities Inc. “An improvement in the German economy is also a positive contrast to the bleak situation in Europe. An upward momentum will depend on whether there will be solid buying in the thin market.”
Concern about Europe’s debt crisis eased after a report yesterday showed German business confidence unexpectedly rose for a second month in December. The Munich-based Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 107.2 from 106.6 in November. The median estimate of 36 economists surveyed by Bloomberg News was for a drop to 106.
Spanish bill sales also boosted confidence in the euro region. The country sold 5.64 billion euros ($7.40 billion) of bills, more than the maximum target, and yields fell as the European Central Bank prepared to start offering banks unlimited three-year loans.
China Resources Land Ltd. (1109), a state-owned developer, advanced 3.8 percent to HK$12.68 and China Overseas Land & Investment Ltd. increased 3.6 percent to HK$13.84, rebounding from their slump yesterday after Chinese developers fell on declining home sales.
Shares also gained after Premier Wen said China’s government will stabilize policies on exports, including rebate measures, and provide capital support to small companies, according to a statement posted on the central government’s website yesterday.
Wen also asked the nation’s export-oriented regions to expand domestic markets. The Hang Seng Composite SmallCap Index (HSSI), which includes both Hong Kong and China-based companies, rose 1.3 percent today.
PetroChina, Asia’s biggest company by market value, rose 3.4 percent to HK$9.43, after oil for January delivery jumped 3.6 percent to $97.22 a barrel yesterday in New York. Minmetals Resources gained 6 percent to HK$3.34 and Jiangxi Copper Co., China’s No. 1 producer of the metal, advanced 1.9 percent to HK$16.84 after the London Metal Exchange Index of prices for six industrial metals including copper and aluminum increased 1.6 percent.
Kunlun Energy Co., a crude-oil provider, jumped 9.1 percent to HK$11.02 after saying it plans to buy a 60 percent stake in PetroChina Beijing Gas Pipeline Co., with the purchase to be completed on Dec. 23.
Among stocks that fell, Ping An Insurance (Group) Co. (2318), China’s second-biggest insurer by market value, sank 2.7 percent to HK$51.50, the steepest of the three drops in the Hang Seng Index, after saying it plans to sell as much as 26 billion yuan ($4.1 billion) of bonds after business expansion brought down its capital adequacy.
Futures on the Hang Seng Index advanced 2.3 percent to 18,390. The HSI Volatility Index slid 5.8 percent to 25.52, the lowest since Aug. 4, indicating options traders expect a swing of 7.3 percent in the benchmark over the next 30 days.
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