Hong Kong Stocks Advance on China Manufacturing, CasinosKana Nishizawa
Hong Kong stocks rose, with the benchmark index capping its biggest weekly gain in six weeks, as China’s manufacturing exceeded estimates and gaming stocks climbed on higher Macau casino revenue.
Galaxy Entertainment Group Ltd., controlled by billionaire Lui Che-woo, rose 1.8 percent. China Power International Development Ltd. climbed 1.3 percent as power producers gained on the manufacturing report. Tingyi (Cayman Islands) Holding Corp. extended an advance after Nomura Holdings Inc. raised its rating on the maker of instant noodles and drinks. Techtronic Industries Co., a power-tool maker that relies on North America for 73 percent of sales, dropped 2.4 percent amid concern the Federal Reserve will reduce stimulus in coming months.
The Hang Seng Index rose 0.2 percent to 23,249.79 at the close in Hong Kong, after falling as much as 0.2 percent. That capped a 2.4 percent gain since Oct. 25, the benchmark’s biggest weekly advance since the period ended Sept. 20. The Hang Seng China Enterprises Index of mainland shares listed in the city added 0.5 percent to 10,678.69.
“Sentiment was shaky on concern about Fed tapering, so today’s Chinese manufacturing data is easing some concern,” said Teresa Chow, a fund manager at RBC Investment (Asia) Ltd., which oversees $1.5 billion. “The market is perceiving it as better news flow.”
China’s manufacturing Purchasing Managers’ Index was 51.4 in October, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. The reading compares with the median estimate of 51.2 in a Bloomberg News survey of 31 economists and 51.1 in September. A number above 50 indicates expansion.
A separate manufacturing gauge from HSBC Holdings Plc and Markit Economics rose to 50.9 from 50.2, matching a preliminary reading.
China Power rose 1.3 percent to HK$3.08, while Huaneng Power International Inc., the listed unit of China’s largest power group, gained 2.1 percent to HK$8.27. China Coal Energy Co., the country’s second-largest producer of the fuel, advanced 1.7 percent to HK$4.84.
Gaming shares jumped after Macau casino revenue surged 32 percent to a record of 36.5 billion patacas ($4.57 billion) in October, boosted by mainland Chinese visitors who spent their Golden Week holiday in the world’s largest gambling hub.
Galaxy added 1.8 percent to HK$58.90, while SJM Holdings Ltd., Asia’s biggest casino operator, gained 3.6 percent to HK$25.95. Sands China Ltd., a unit of billionaire Sheldon Adelson’s Las Vegas gaming company, climbed 1.8 percent to HK$56.10.
Tingyi surged 6.4 percent to HK$23.30, the biggest jump on the Hang Seng Index. Tingyi extended yesterday’s gain after Nomura Holdings Inc. raised its rating to buy from neutral and boosted the target price to HK$26 from HK$20.50. Asahi Group Holdings Ltd. said in an e-mail its unit and Tingyi aim to form a milk powder venture this month.
China Eastern Airlines Corp. added 3.4 percent to HK$2.77 after Daiwa lifted its target price to HK$3.40 from HK$2.80 while maintaining its buy recommendation.
The Hang Seng Index rose 1.5 percent in October for its first back-to-back monthly advance since January, as data from China signaled the world’s second-largest economy is stabilizing. The measure remains the second-worst performer this year among developed markets tracked by Bloomberg, amid concern that a reduction in the Fed’s monthly bond purchases will spur outflows from the city’s assets.
The U.S. central bank’s policy statement this week didn’t contain a sentence from the previous one saying tighter financial conditions could slow the improvement in the economy, sparking speculation the Fed may cut stimulus in coming months.
While fiscal policy is “restraining economic growth,” the Fed sees signs of “underlying strength,” it said.
The Standard & Poor’s 500 Index dropped 0.4 percent yesterday for its second straight daily decline. Futures on the gauge climbed 0.1 percent today.
Techtronic slid 2.4 percent to HK$19.04, while Yuen Industrial (Holdings) Ltd., a shoemaker that gets about 29 percent of sales from the U.S., sank 1.6 percent to HK$20.95.
Among other stocks that fell, Shimao Property Holdings Ltd., controlled by billionaire Hui Wing Mau, dropped 2.2 percent to HK$19.10, and Guangzhou R&F Properties Co., a builder in the southern Chinese city, retreated 1.8 percent to HK$13.36. Chinese developers jumped yesterday amid speculation the nation will refrain from controlling the private housing market.
The Hang Seng Index traded at 11.1 times estimated earnings, compared with 15.9 for the S&P 500 yesterday. Futures on the measure rose 0.2 percent to 23,279. The Hang Seng Volatility Index slid 3.4 percent to 14.31, indicating traders expect the benchmark equity index to swing 4.1 percent in the next 30 days.