Hong Kong Stocks Rise as Automakers Gain; Zoomlion SlidesKana Nishizawa and Anna Kitanaka
Hong Kong stocks rose as automakers advanced after Credit Suisse Group AG forecast growth in China’s car market. Zoomlion Heavy Industry Science & Technology Co. slumped after becoming the latest Chinese company to face questions about its accounting.
Guangzhou Automobile Group Co. jumped 7.4 percent. Aluminum Corp. of China Ltd., the nation’s biggest producer of the metal, gained 1.1 percent after sales at industry bellwether Alcoa Inc. beat estimates. Zoomlion sank 6.4 percent after a newspaper said it received an anonymous letter questioning the company’s sales. Zoomlion said the allegations are false.
The Hang Seng Index climbed 0.5 percent to 23,218.47 at the close in Hong Kong. About three stocks rose for each that fell on the 50-company measure, which headed for its first gain in four days. The benchmark last week rose to the highest level since June 2011. The Hang Seng China Enterprises Index of mainland companies advanced 0.9 percent to 11,817.77 today.
“The general trend for equities is positive,” said Peter Lai, director of sales at brokerage DBS Vickers Hong Kong Ltd. “The global economic recovery is underway and the kind of pullback that we saw in the past couple of days is healthy.”
Hong Kong’s benchmark index surged 23 percent last year amid signs China’s economy is improving and as central banks around the globe added stimulus. Shares on the measure traded at 11.2 times estimated earnings yesterday, compared with 13.1 for the Standard & Poor’s 500 Index and 11.9 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
Futures on the Hang Seng Index rose 0.3 percent to 23,230. The HSI Volatility Index slid 4.2 percent to 13.88, indicating traders expect a swing of 4 percent for the benchmark in the next 30 days.
Guangzhou Automobile advanced 7.4 percent to HK$7.38, its highest close since May. The Toyota Motor Corp. partner had its rating raised to neutral from underperform by Credit Suisse.
China’s passenger car market will grow 8 percent to 10 percent annually in the next three to five years, Credit Suisse said in a note initiating coverage of the sector with an overweight rating.
Dongfeng Motor Group Co., which makes vehicles with Nissan Motor Co., climbed 2.3 percent to HK$12.24. BYD Co., partly owned by Warren Buffett’s Berkshire Hathaway Inc., advanced 9.2 percent to HK$26.
Makers of aluminum rose after industry bellwether Alcoa reported fourth-quarter sales that exceeded analysts’ estimates after the close of markets in the U.S. Demand for the metal should recover this year as China’s economic rebound drives demand for cans, cars and office buildings, it said.
Aluminum Corp. of China rose 1.1 percent to HK$3.82. United Co. Rusal, the world’s largest aluminum producer, climbed 0.2 percent to HK$5.
Futures on the S&P 500 Index climbed 0.3 percent today. The gauge lost 0.3 percent yesterday as investors awaited results from Alcoa, traditionally the first company in the Dow Jones Industrial Average to report quarterly earnings.
“We are at a juncture with the earnings season just kicking off in North America,” said Tim Schroeders, who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “People will want to assess the lay of the land, in particular any forward-looking comments that companies make.”
Among stocks that declined, Zoomlion fell 6.4 percent to HK$11.04 even after denying a report in the Ming Pao newspaper that the maker of cranes and concrete pumps may have questionable sales figures. Zoomlion said it doesn’t exaggerate earnings and allegations about its financial information are “false, groundless and misleading.”
Chinese companies’ finances face increased scrutiny after short seller Carson Block’s Los Angeles-based Muddy Waters LLC uncovered irregularities including those at now-bankrupt Sino-Forest Corp.