Chinese Shares Rise in Hong Kong, Shanghai After Trade Data

Chinese stocks rose, sending a gauge of Hong Kong-listed companies to their biggest two-day gain in three months, after trade data exceeded economists’ estimates.

PetroChina Co., the nation’s biggest oil producer, extended yesterday’s rally, advancing 2.1 percent after its parent company discovered a natural gas reserve big enough to supply China’s needs for almost two years. China Mengniu Dairy Co. surged 3 percent in Hong Kong after Danone agreed to raise its stake. Beijing Wangfujing Department Store Group Co. paced gains for consumer-discretionary companies in Shanghai after saying it will work with Tencent Holdings Co. on mobile shopping.

The Hang Seng China Enterprises Index rose 1.4 percent to 9,996.76 at the close, extending yesterday’s 2.5 percent surge after JPMorgan Chase & Co. predicted a market rally within weeks. The Shanghai Composite added 0.3 percent to 2,109.96 at the close, rising for a fourth day in the longest winning streak since October. Overseas shipments climbed 10.6 percent last month, compared with analysts’ estimate for a 0.1 percent gain.

“Hong Kong shares are rising more than Shanghai because they are more aligned with global markets,” said Zeng Xianzhao, an analyst at Everbright Securities Co. “Local investors are not as convinced about the export data because you have to take into account the Chinese New Year effect -- the new year was is in January this year and February last year.”

China’s imports advanced 10 percent, leaving a trade surplus of $31.9 billion, the widest for January since 2009, according to the General Administration of Customs. This year’s new year holiday began Jan. 31, while last year’s started on Feb. 9. A widening discrepancy between Hong Kong and Chinese data for bilateral trade in December spurred speculation that China’s numbers are again exaggerated because of fake exports.

Improving Data

“The sequential trend in China’s export growth has been rising at a decent pace in recent months, suggesting that China’s export sector is benefitting from the current upturn in the global economy,” Zhu Haibin, JPMorgan Chase & Co.’s China economist in Hong Kong, wrote in a note. “However, we are somewhat puzzled by the unexpected strength in the January trade data.”

Improving economic data may spur investors to focus on policies that emerge from the National People’s Congress scheduled for next month, Michael Yu, a strategist at JPMorgan in Hong Kong, wrote in a report dated Feb. 10. The ruling Communist Party unveiled its biggest package of economic reforms since the 1990s in November, including more private investment in state-controlled industries and a looser one-child policy.

Consumer Companies

PetroChina advanced 2.1 percent to HK$7.94 in Hong Kong, the biggest gain since Nov. 19. China National Petroleum Corp.’s natural gas find in Sichuan province has a reserve of 440 billion cubic meters, of which 308 billion cubic meters are technically recoverable. China Petroleum & Chemical Corp., the country’s biggest refiner, climbed 2.1 percent to HK$6.02.

China Mengniu Dairy advanced 3 percent to HK$37.95. Danone, the owner of Activia yogurt and Evian water, will increase its holding in Mengniu to 9.9 percent from 4 percent.

The CSI 300 added 0.3 percent to 2,291.25. Trading volumes in the Shanghai index were 60 percent above the 30-day average, according to data compiled by Bloomberg.

The Shanghai gauge has rallied 6 percent since its price-to-earnings ratio fell to a record on Jan. 20, paring this year’s loss to 0.5 percent. Its multiple rebounded to 7.9 times projected profit, after falling to 7.5 last month. The H-shares gauge trades at 6.6 times forecast 12-month earnings, compared with the five-year average of 9.6, Bloomberg data showed.

A gauge of consumer-discretionary companies in the CSI 300 rose 1.1 percent, the most among 10 industry groups. Beijing Wangfujing jumped 10 percent to 20.25 yuan, the biggest climb since Dec. 8, 2010. It will work with Tencent on services through WeChat, a mobile application.

Trust Concerns

Gree Electric Appliances Inc. rose 3.9 percent to 31.08 yuan, extending gains to a fourth day. The shares have climbed 9.6 percent since markets resumed after a weeklong Chinese new year holiday.

A Chinese trust product issued by Jilin Province Trust Co. and backed by a loan to a coal company Shanxi Liansheng Energy Co. failed to repay investors when some tranches matured, the Shanghai Securities News reported today, without citing anyone. The delay may add to investors’ concerns about repayment risks in China’s $1.6 trillion trust industry, following a last-minute bailout last month.

“Investors are concerned this may become a trend in the long term,” says Liu Jun, an analyst at Chang Jiang Securities Co. “There will be more of such cases in the future and will weigh on financial stocks.”

Shanghai Pudong Development Bank Co. slid 0.4 percent to 9.50 yuan. China Merchants Bank Co. lost 0.6 percent to 10.51 yuan.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. jumped 2.7 percent yesterday, led by airlines. The Standard & Poor’s 500 Index added 1.1 percent as comments by Federal Reserve Chairman Janet Yellen fueled bets the economy is strong enough to weather further stimulus cuts.

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