Hong Kong Stocks Climb to One-Month High Amid Mainland Inflows

  • Mainland investors buy Hong Kong stocks through Shanghai link
  • Macau gaming companies extend rally amid revenue optimism

Hong Kong stocks advanced to a one-month high, buoyed by mainland buying via an exchange link, as investors speculated a recent selloff was overdone.

The Hang Seng Index rose 0.8 percent to 22,744.85 at the close. Belle International Holdings Ltd. and Wharf Holdings Ltd. were the biggest gainers. Intime Retail Group Co. surged 36 percent, the most since its 2007 debut, after Alibaba Group Holding Ltd. and Intime’s founder offered to privatize the department store chain. Chow Tai Fook Jewellery Group Ltd. advanced 5.3 percent after saying same-store sales in China rose 4 percent last quarter from a year earlier. The Shanghai Composite Index slipped 0.3 percent.

Hong Kong’s benchmark equity gauge has advanced 3.4 percent this year after slumping 5.6 percent in the fourth quarter. Mainland investors bought a net 25.6 billion yuan ($3.7 billion) of Hong Kong stocks through the Shanghai link from Dec. 21 through Monday, according to data compiled by Bloomberg. This compares with just 2.2 billion yuan during the previous 12 sessions. China’s factory prices rose at the fastest pace in more than five years in December, data released Tuesday showed.

“There may be some focus turning to stocks that didn’t do so well in 2016 and prices are at low levels,” said Linus Yip, a strategist at First Shanghai Securities in Hong Kong. China’s inflation figures “may help market sentiment but what we’re seeing is a rebound in the overall market.”

  • The MSCI Hong Kong Index gained 1.5%, the most since Nov. 10, with MGM China Holdings Ltd. leading the advance. SJM Holdings Ltd. rose 3.3%, while Sands China Ltd. gained 2.2%. Macau’s gross gaming revenue for the first eight days of January suggests 15% growth from the previous year, according to JPMorgan Chase & Co., while Sanford C. Bernstein & Co. raised its estimates for the industry’s January revenue.
  • China shopping malls jumped. Maoye International Holdings Ltd. rallied as much as 12% after announcing plan to sell 11.3% of Maoye Communication & Network Co. for 1.4 billion yuan ($202 million). Golden Eagle Retail Group Ltd. rose 2%, Parkson Retail Group Ltd. advanced 6%, New World Department Store China Ltd. gained 3.9%.
  • Miricor Enterprises Holdings Ltd. surged as much as 525% in its Hong Kong trading debut.
  • China’s IPO share debuts all rose by the daily limit: Anhui Province Natural Gas Development Co. and Ningbo Tianlong Electronics Co. surged by the 44% limit in Shanghai, while Zhejiang Huatong Meat Products Co. and Guangdong Wanlima Industry Co. posted the same gains in Shenzhen.
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