Hong Kong Stocks Rise Before China Data; Yue Yuen DropsKana Nishizawa
Hong Kong stocks rose a third day before the release of China trade and inflation data this week. Yue Yuen Industrial Holdings Ltd. slumped after saying there was a downturn in its first-quarter performance.
PetroChina Co., the country’s biggest energy producer, gained 2.5 percent as energy shares extended yesterday’s gains. SJM Holdings Ltd., Asia’s biggest casino company, gained 3 percent after reporting higher profit. Beijing Tong Ren Tang Chinese Medicine Co., a maker of health products, more than doubled on its trading debut. Yue Yuen, which makes shoes for Nike Inc., dropped 12 percent in its biggest slide in four years.
The Hang Seng Index gained 0.6 percent to 23,047.09 at the close, with more than twice as many stocks advancing as declining on the 50-member gauge. Trading volume was 11 percent below the 30-day intraday average. The Hang Seng China Enterprises Index of mainland companies rose 1 percent to 11,115.05.
“Investors have tuned into a lower-growth environment,” said Michael Liang, chief investment officer at Foundation Asset Management (HK) Ltd., which manages about $150 million. “It’s probably OK to wait for few days to see whether there’s any surprise to China’s inflation numbers.”
The Hang Seng Index climbed 7.1 percent from this year’s low on April 18 as data from the U.S. signaled an improving economy, outweighing slower growth in China. The equity measure traded at 10.8 times estimated earnings yesterday, compared with 14.7 for Standard & Poor’s 500 Index, according to data compiled by Bloomberg.
Data tomorrow is expected to show China’s exports grew 9.1 percent in April, the slowest pace in five months, while imports rose 13 percent, sliding from 14 percent in March, according to Bloomberg surveys of economists. A report due May 9 may show April consumer prices gained 2.3 percent from a year earlier, below a government assumption for 2013 of 3.5 percent, following a 2.1 percent advance in March, according to the median estimate of economists.
Futures on the Standard & Poor’s 500 Index were little changed today. The U.S. equity gauge climbed 0.2 percent yesterday to a record, led by financial shares, after data last week showed employers added more workers than forecast in April.
SJM increased 3 percent to HK$20.35 after reporting a 12 percent increase in first-quarter profit, boosted by more spending by high-stakes gamblers. Gome Electrical Appliances Holding Ltd., China’s second-biggest electronics retailer, gained 4.9 percent to 85 Hong Kong cents after saying it expects higher net income for the three months through March.
Beijing Tong Ren Tang more than doubled to HK$6.53 from its offer price of HK$3.04 on its first day of trading.
Energy shares rose after oil prices capped its biggest three-day advance since August yesterday in New York. PetroChina gained 2.5 percent to HK$9.97. Cnooc Ltd., China’s biggest offshore oil company, increased 1.4 percent to HK$14.58 after UBS AG raised its rating to buy from neutral.
Among stocks that fell, Yue Yuen tumbled 12 percent to HK$23.80, the biggest drop on the Hang Seng Composite Index. The shoemaker cited rising input costs and relocation of a production facility for a “significant downturn” in first-quarter performance from a year earlier.
China Shipping Container Lines Co., the country’s second-biggest shipping company, jumped 11 percent to HK$2.09. Five 18,000 twenty-foot equivalent units container ships orders should help company expand overall vessel size, KGI Securities Co. analysts led by Huei-chen Flannery wrote in a report.
Futures on the Hang Seng Index gained 0.7 percent to 22,910. The HSI Volatility Index dropped 2.4 percent to 14.92, indicating traders expect a swing of 4.3 percent for the equity benchmark in the next 30 days.