Hong Kong Stocks Post Weekly Advance as CK Hutchison Leads Gainsby
Hang Seng Index climbs to highest level since August 2015
Hutchison jumps after its Italian merger plan wins EU approval
Hong Kong stocks posted a weekly gain as CK Hutchison Holdings Ltd. climbed after getting approval for an Italian merger, and Bank of China Ltd. extended a rally after its earnings beat estimates.
The Hang Seng Index was up 1.6 percent for the week, after rising 0.5 percent on Friday. CK Hutchison was the day’s top performer of the gauge after receiving the green light from the European Union to create Italy’s largest wireless provider. Bank of China climbed for a fourth day in a row after reporting 3.4 percent growth in half-yearly profit this week. The Shanghai Composite Index closed 0.1 percent higher, as 50-day volatility on the gauge dropped to the lowest level since October 2014.
Hong Kong’s benchmark equity measure has rebounded 27 percent from its February low to a one-year high after 65 percent of companies included in the index beat profit estimates in the six months to June and investors bet central banks globally will add more stimulus. The rally has slowed in recent days as investors wait for clues on the pace of U.S. interest-rate hikes, including payrolls data due Friday.
“Hutchison shares are adding to the mood on the Italian merger news,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd.
Investor bullishness toward stocks traded in Hong Kong contrasts with subdued activity on mainland bourses. The Hang Seng China Enterprises Index has erased its loss for the year, while the premium of mainland shares over their Hong Kong peers has narrowed to near the least in 11 months. The Shanghai Composite has moved less than 1 percent on a closing basis for 14 straight days. It’s still down 13 percent this year, one of the world’s biggest declines.
The Hang Seng Index rose to 23,266.70, with turnover 45 percent higher than a 30-day average. The Hang Seng China Enterprises Index climbed 0.8 percent, taking its weekly gain to 1.4 percent. Trading volume on the CSI 300 Index of some of China’s largest companies was 19 percent below the 30-day average.
CK Hutchison climbed 3.3 percent, the most in almost a year. The company and VimpelCom Ltd. got approval for the deal after agreeing to help a smaller rival become the country’s fourth mobile carrier. The approval halts a string of setbacks billionaire Li Ka-shing has faced in the past year and paves the way for him to turn around his least profitable business in Europe.
A measure of Hong Kong financial companies has risen 3.1 percent since last Friday. Bank of China has climbed 4.7 percent, while HSBC Holdings Plc, which announced a $2.5 billion stock buyback a month ago, rallied 5.6 percent in an eighth week of gains.
Cheung Kong Infrastructure Holdings Ltd. and Sun Hung Kai Properties Ltd. rose at least 1.5 percent after Hong Kong home sales advanced to the highest level in at least 14 months in August.
Gree Electric Appliances Inc. advanced in Shenzhen as trading resumed after a share suspension of more than six months. China’s largest maker of air-conditioners said in August that it is venturing into the fast-growing electric vehicle market with its 13 billion yuan ($2 billion) acquisition of Zhuhai Yinlong New Energy Co.