Main­land stocks rally to seven-month high in HK

China Daily (USA) - - BUSINESS - By BLOOMBERG

Main­land stocks traded in Hong Kong climbed to a seven-month high on Mon­day, led by de­vel­op­ers and build­ing-ma­te­ri­als mak­ers, after bet­ter-than-ex­pected US jobs data bol­stered con­fi­dence in the world’s big­gest econ­omy. Coal shares ral­lied in main­land trad­ing.

The Hang Seng China En­ter­prises In­dex ad­vanced 1.6 per­cent in Hong Kong, where the lo­cal cur­rency is pegged to theUS dol­lar. China Vanke Ltd climbed for a fifth straight day to pace gains for a mea­sure of de­vel­op­ers. The Shang­hai Com­pos­ite closed above 3,000, as an in­crease in coal prices led en­ergy pro­duc­ers higher.

An in­dex tracking the pre­mium of main­land shares over Hong Kong peers fell to its low­est level since Oc­to­ber.

Up­beat US jobs data on Fri­day helped push the S&P 500 In­dex to a record high. The Bank of Eng­land last week cut its key rate for the first time in more than seven years and boost­ed­mon­e­tary stim­u­lus to ease a slump fol­low­ing the UK’s vote to exit the Euro­pean Union. China’s over­seas ship­ments de­clined 4.4 per­cent in dol­lar terms in July, data showed on Mon­day, in­di­cat­ing slug­gish ex­ter­nal de­mand.

“H shares have more global par­tic­i­pants, so the mar­ket tends to do well at a time when global cen­tral banks are re­leas­ing liq­uid­ity and US stocks rose to records,” said Wu Kan, a fund man­ager at JK Life In­sur­ance Co in Shang­hai. Wu said the gains for main­land shares were a “tech­ni­cal” re­bound, adding he would re­duce hold­ings if they rose fur­ther.

The Hang Seng China En­ter­prises In­dex closed at 9,276.56, while the Shang­hai Com­pos­ite climbed 0.9 per­cent to 3,004.28. The Hang Seng In­dex gained 1.6 per­cent, fin­ish­ing at its high­est level since Novem­ber.

The H share in­dex has now lost 4 per­cent this year, while theShang­haiCom­pos­iteis still down 15 per­cent. The gap has sent a mea­sure of cor­re­la­tion be­tween the two gauges to the low­est level since 2007, sig­nal­ing for­eign­ers may be more op­ti­mistic in their out­look for Chi­nese equities than lo­cal in­vestors.

Vanke ad­vanced 1.5 per­cent in­HongKong to its high­est close since May 4, and China Re­sources Land Ltd climbed to a four-month high. A mea­sure of prop­erty de­vel­op­ers in the city in­creased for a third day.

“Cap­i­tal has been flow­ing into mar­kets in Asia in­clud­ing Hong Kong after Brexit and the UK cut in­ter­est rates,” said KenChen, an an­a­lyst with­KGI Se­cu­ri­ties Co in Shang­hai.

LU QIJIAN / FOR CHINA DAILY

In­vestors check stock prices at a bro­ker­age in Fuyang, An­hui prov­ince.

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