Hong Kong Stocks Rise Third Day as China New Loans Top ForecastsKana Nishizawa
Hong Kong stocks rose, with the benchmark index capping its longest winning streak in two weeks, after China’s new local-currency loans exceeded economists’ forecasts. Food suppliers climbed on speculation an outbreak of bird flu will boost demand.
Tingyi (Cayman Islands) Holding Corp., a maker of instant noodles and beverages, rose 2.6 percent. Bank of Communications Co., the mainland’s fifth-largest lender, gained 1.2 percent. Hengdeli Holdings Ltd., the retail partner of Swatch Group AG in China, jumped 11 percent after Jefferies Group Inc. recommended investors hold the stock in new coverage. Lenovo Group Ltd., the world’s second-biggest maker of personal computers, slumped 5.8 percent on concern demand is slowing.
The Hang Seng Index rose 0.3 percent to 22,101.27 at the close, capping its longest winning streak since March 27. The gauge pared last week’s loss prompted by the outbreak of a new strain of bird flu in China. Almost three stocks advanced for each decliner in the 50-member gauge, with volumes 18 percent below its 30-day intraday average. The Hang Seng China Enterprises Index, which tracks mainland shares, gained 0.1 percent to 10,708.25.
“As a whole we probably had seen a short-term low last week so we probably would consolidate first and then later on rise further from here,” said Alex Wong, a Hong Kong-based director at Ample Capital Ltd. “China new loans are not that bad. The sentiment probably will improve from here.”
Cyprus, Bird Flu
Through yesterday the Hang Seng Index slid 7.5 percent from a Jan. 30 high as banking woes in Cyprus threatened to reignite Europe’s debt crisis, and on concern a bird flu epidemic might break out in China. Shares pared losses this week as slower-than-estimated inflation data in China eased pressure on policy makers to tighten credit.
Hong Kong’s benchmark index traded at 10.6 times estimated earnings yesterday, compared with its five-year average of 12.9 and the Standard & Poor’s 500 Index’s multiple of 14.3, data compiled by Bloomberg show.
Futures on the Standard & Poor’s 500 Index were little changed today. The measure yesterday climbed 1.2 percent to a record, as a report showed China’s imports expanded, Japan reiterated its stimulus plans and investors speculated earnings will beat estimates.
New local-currency loans totaled 1.06 trillion yuan ($171 billion) in March, the People’s Bank of China said today, compared with the 900 billion yuan median estimate in a Bloomberg survey of 34 economists. M2, China’s broadest measure of money supply, rose 15.7 percent, more than the median forecast of 14.6 percent.
Bank of Communications rose 1.2 percent to HK$5.85, while Agricultural Bank of China Ltd., the country’s third-biggest lender by market value, gained 0.9 percent to HK$3.53.
Tingyi rose 2.6 percent to HK$21.40, while China Resources Enterprise Ltd., the government-backed partner of SABMiller Plc., climbed 2.3 percent to HK$24.75. Hengan International Group Co., a maker of snacks, tissue paper and hygiene products, increased 2.8 percent to HK$77.60. The companies were the top three gainers in the Hang Seng Index. China Foods Ltd., a maker of products including beverages, snacks and instant food, rose 3.7 percent to HK$4.24.
“Shares of food suppliers are strong on speculation people will stockpile amid the bird flu outbreak,” said Mari Oshidari, a Hong Kong-based Asia market strategist at Okasan Securities Group Inc. “There’s also expectation demand for hygiene products will increase.”
China confirmed five more infections from the H7N9 bird flu yesterday, taking the total to 33, as authorities ordered testing at poultry markets nationwide and the culling of birds where the virus is detected. Nine people have died from the infection as of yesterday, according to the Chinese government.
Alibaba Group Holding Ltd.’s e-commerce platform Taobao Marketplace said it would shut down online trading of live poultry “under necessary circumstances” this week as it takes steps to protect against the spread of bird flu.
Chinese police detained eight people in the provinces of Zhejiang, Shaanxi, Gansu and Liaoning for spreading online rumors about the bird flu virus, the official Xinhua News Agency reported today, citing local authorities.
Hengdeli surged 11 percent to HK$2.41, and Emperor Watch & Jewellery Ltd., which sells high-end timepieces, increased 6.8 percent to 79 Hong Kong cents after Jefferies said Hong Kong and China jewelers and watch retailers may see a rebound in sales, gross margins and profits after consolidation last year.
China Resources Land Ltd., the second-biggest mainland property company traded in Hong Kong, advanced 1.4 percent to HK$21.80, while Sino-Ocean Land Holdings Ltd., a developer that has the nation’s biggest insurer as its largest shareholder, rose 1.6 percent to HK$5.05. A residential plot in Shanghai was sold for 3.7 billion yuan yesterday, the most expensive in more than two years, the Shanghai Daily reported, citing Soufun.com.
“I like China property,” Ample Capital’s Wong said. “Even with cooling measures and government controls the selling in flats remains fast and prices remain firm. The underlying situation is still ok.”
Among stocks that fell, Lenovo dropped 5.8 percent to HK$7.09, the steepest drop on the Hang Seng Index. Gartner Inc., a market-research firm, said global personal-computer shipments declined 11 percent in the first quarter to 79.2 million units. Separately, personal computer shipments will drop 4 percent this year from a year earlier as tablets continue to gain market share, Citigroup Inc. wrote in a report.
Hang Seng Index futures added 0.8 percent to 22,135. The HSI Volatility Index gained 1.1 percent to 16.31, indicating traders expect a swing of 4.7 percent for the equity benchmark in the next 30 days.