Hong Kong H Shares Head for 10-Week High on China SupportJonathan Burgos
Hong Kong stocks rose, with a gauge of mainland shares listed in the city heading for its highest close in more than two months, after China outlined a package of measures to support growth including railway spending.
The Hang Seng China Enterprises Index, also known as the H-Share index, added 1.3 percent to 10,150.72 as of 9:32 a.m. in Hong Kong. The Hang Seng Index climbed 0.8 percent to 22,701.52, rising a fifth day as it headed for its longest winning streak since January. China is introducing policies to support the economy and create jobs after a slowdown endangered the nation’s 7.5 percent growth this year.
The government will sell 150 billion yuan ($24 billion) of bonds this year to help build railways mainly in the less-developed central and western regions, the State Council said in a statement yesterday. Authorities will also create a development fund of 200 billion yuan to 300 billion yuan a year to increase sources of rail financing.
The Hang Seng Index is the second-worst performer among developed markets this year as weak manufacturing and industrial profit data add to speculation China will miss its economic growth target. The government today released its non-manufacturing PMI, showing a decline to 54.5 in March from 55 the month before. A reading above 50 indicates expansion in the services industry.
The Hang Seng Index traded at 10.3 times estimated earnings yesterday, compared with 16.1 for the Standard & Poor’s 500 Index.
Futures on the U.S. equity gauge were little changed after the benchmark yesterday added 0.2 percent to extend a record. ADP Research Institute said employment rose by 191,000 last month, following a 178,000 gain in February that was stronger than estimated. The Commerce Department said yesterday that factory orders rose 1.6 percent in February, topping estimates for a 1.2 percent advance. Government payrolls data will be issued tomorrow.