Hong Kong Stocks Rise to One-Month High on Energy, Mining Gains

Hong Kong stocks rose, with the benchmark index capping its highest close in a month, as mining and energy companies climbed on higher commodity prices.

Jiangxi Copper Co., the country’s biggest producer of the metal, gained 4.4 percent. China Petroleum & Chemical Corp., the nation’s largest refiner, advanced 2 percent after Morgan Stanley said the company will benefit from a cut in fuel prices and refinery margins will probably improve. Semiconductor Manufacturing International Corp., a chip-services provider, jumped 8 percent after its first-quarter profit beat estimates.

The Hang Seng Index advanced 1 percent to 22,401.24, its highest close since March 27. Three companies gained for each that declined in the 50-member gauge, with trading volume 8.4 percent above the 30-day average. The Hang Seng China Enterprises Index of Chinese companies listed in the city gained 1.3 percent to 10,772.76.

“Investors now are bottom fishing, they do see stocks as undervalued but sentiment is short-term oriented,” said Jackson Wong, vice president at Hong Kong-based brokerage Tanrich Securities Co. “China’s power companies have been riding on a strong trend. Especially in current environment where we don’t have big directions, investors are buying safer bets.”

Through yesterday the Hang Seng Index fell 6.9 percent from this year’s high on Jan. 30, making Hong Kong the worst performer among developed markets. Banking woes in Cyprus, the outbreak of a new bird-flu virus and disappointing economic reports from China pushed shares lower, sending the measure to 10.6 times estimated earnings yesterday. That compares with a five-year average of 12.7 and the Standard & Poor’s 500 Index’s multiple of 14.3, data compiled by Bloomberg show.

Price Cuts

China, the world’s second-biggest oil consumer, cut gasoline and diesel prices today after crude declined earlier this month. Retail gasoline falls by 395 yuan ($64) a metric ton and diesel by 400 yuan, the National Development and Reform Commission, the country’s top economic planner, said on its website yesterday.

The cuts should benefit China Petroleum & Chemical, also known as Sinopec, Morgan Stanley analysts led by Andy Meng wrote in a report dated yesterday, maintaining a view of the oil and gas sector as attractive.

Sinopec rose 2 percent to HK$8.53, while Cnooc Ltd., China’s biggest offshore oil producer, gained 2.9 percent to HK$14.44. PetroChina Co., the nation’s largest energy producer, advanced 1.4 percent to HK$9.69. Kunlun Energy Co., a gas supplier controlled by PetroChina, rose 1.2 percent to HK$14.74. PetroChina and Sinopec are scheduled to release their first-quarter earnings today.

Oil Advances

West Texas Intermediate oil for June delivery advanced 2.5 percent in New York yesterday, while the London Metal Exchange Index of industrial metals jumped 1.8 percent.

A measure of energy companies had the biggest increase among the Hang Seng Composite Index’s 11 industry groups, followed by materials companies, which includes miners. Jiangxi Copper climbed 4.4 percent to HK$15.76, while Aluminum Corp. of China Ltd., the nation’s largest supplier of the light metal by market value, gained 2.1 percent to HK$2.95. United Co. Rusal, the world’s largest aluminum producer, increased 1.8 percent to HK$4.01.

Energy companies including China Shenhua Energy Co., the country’s biggest coal producer, are being bought on speculation they will benefit from urbanization spending in China, according to Gavin Parry, the managing director of Hong Kong-based brokerage Parry International Trading Ltd. China Shenhua Energy rose 3.9 percent to HK$26.85, the biggest gain in the Hang Seng Index.

‘Market Waiting’

“The market has been waiting for the NDRC to actually spell out its statements at the National People’s Congress on urbanization spending,” Parry said.

China may release a detailed urbanization plan in the first-half, China Securities Journal reported, citing Yuan Xilu, deputy head of the NDRC’s planning department.

Futures on the Standard & Poor’s 500 Index rose 0.1 percent today. The index was little changed yesterday in New York, as investors weighed quarterly earnings at companies from Boeing Co. to Apple Inc.

Semiconductor Manufacturing, which gets more than half its revenue from North America, jumped 8 percent to 54 Hong Kong cents after its first-quarter profit surged to $40.6 million compared with a loss of $42.8 million. The average estimate of 3 analysts compiled by Bloomberg was $10.3 million.

Casinos Gain

Sands China Ltd., the Asian unit of Sheldon Adelson’s Las Vegas company, rose 3.7 percent to HK$42.05. Wynn Macau Ltd., the Hong Kong-listed casino unit of Wynn Resorts Ltd., jumped 6.2 percent to HK$23.30 while Galaxy Entertainment Group Ltd., a casino operator founded by billionaire Lui Che-Woo, rose 3 percent to HK$33.90. Macquarie Group Ltd. raised its rating on Macau gaming sector to overweight from equal-weight.

China Minsheng Banking Corp., the nation’s first non-state lender, rose 4.8 percent to HK$9.82 after its first-quarter profit rose 20 percent from a year earlier to 11 billion yuan, beating the average analyst estimate of 10.54 billion yuan.

Hang Seng Index futures rose 1.3 percent to 22,420. The HSI Volatility Index retreated 1 percent to 16.44, indicating traders expect a swing of 4.7 percent for the equity benchmark in the next 30 days.

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