Hong Kong Stocks Advance Ahead of U.S. Retail Sales Data
Hong Kong stocks rose, with the benchmark index heading for its first advance in three days, before the release of U.S. retail sales data expected to signal demand is recovering in the world’s largest economy.
Yue Yuen Industrial Holdings Ltd. (551), a maker of shoes for Nike Inc. that counts the U.S. as its biggest market, added 1.1 percent. Air China Ltd. gained 2.7 percent, leading Chinese carriers higher, after the companies reported higher revenue per passenger kilometers traveled for July. SouthGobi Resources Ltd. sank 4 percent after saying Aluminum Corp. of China Ltd. may withdraw its C$925 million ($931 million) offer for the coal producer on concern Mongolia may block the deal.
The Hang Seng Index advanced 0.2 percent to 20,130.15 as of the midday trading break in Hong Kong, paring gains of as much as 0.9 percent. The gauge climbed 2.4 percent last week on speculation China will add to economic stimulus after export growth collapsed, industrial production unexpectedly slowed and inflation decelerated. The Hang Seng China Enterprises Index of mainland companies was little changed at 9,811.08.
“People are looking for some upside surprises,” Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State Global Asset Management, which oversees about $150 billion, said on Bloomberg Television. “The global economic environment makes that pretty difficult. The U.S. data is going to be OK, but the politics of the budget and debt ceiling ahead of the elections could be an issue for the markets over the next few months.”
Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The gauge slid 0.1 percent yesterday after commodities declined amid concern about slowing Asian economic growth.
Exporters advanced before the release of data today that is forecast to show sales at U.S. retailers rose in July for the first time in four months. The projected 0.3 percent advance in purchases would follow a 0.5 percent drop in June, according to the median forecast of economists surveyed by Bloomberg News.
Yue Yuen added 1.1 percent to HK$23.35. Foxconn International Holdings Ltd. (2038), the assembler of mobile phones for Nokia Oyj, climbed 3.6 percent to HK$2.91.
Chinese airlines advanced. Continued improvements in revenue per passenger kilometers traveled in July could help boost core earnings for the carriers, Nomura Holdings Inc. analysts including Jim Wong wrote in a note to clients today.
Air China climbed 2.7 percent to HK$5.38. China Eastern Airlines Corp. rose 0.8 percent to HK$2.66.
Among stocks that fell, SouthGobi sank 4 percent to HK$29.85. “There is no clear way forward” for the proposed offer by Aluminum Corp. of China for a controlling interest in SouthGobi, Alex Molyneux, chief executive officer of the target coal producer, said today in a conference call.
Swire Properties Ltd., the owner of the Pacific Place and Island East office and shopping mall complexes in Hong Kong, declined 5.9 percent to HK$22.45. John Swire & Sons Ltd. will sell 234 million shares of Swire Properties at HK$21.53 apiece, according to a statement to Hong Kong’s stock exchange yesterday. The sale cuts its holdings in the company to 3.71 percent from 7.71 percent.
The benchmark Hang Seng Index (HSI) fell 7.4 percent from this year’s high in February through yesterday amid signs China’s slowdown is deepening and on concern Europe will struggle to contain its debt crisis. Shares on the gauge were valued at 10.6 times estimated earnings on average, compared with 13.6 for the S&P 500 Index and 11.6 for Stoxx Europe 600 Index.
Futures on the Hang Seng Index added 0.4 percent to 20,123. The HSI Volatility Index (VHSI) slipped 1.5 percent to 18.42, indicating traders expect a swing of about 5.3 percent in the benchmark index during the next 30 days.
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