Hong Kong stocks rally to high­est level in nine months on earn­ings op­ti­mism

China Daily (USA) - - Q&A WITH CEO - By BLOOMBERG

Hong Kong stocks climbed to their high­est level since Novem­ber af­ter Ten­cent Hold­ings Ltd, Ping An In­sur­ance (Group) Co and Len­ovo Group Ltd earn­ings topped es­ti­mates.

The Hang Seng In­dex added 1 per­cent at the close. Ten­cent, which has the big­gest weight­ing in the gauge, surged to a record af­ter re­port­ing a 47 per­cent rise in quar­terly profit. Ping An In­sur­ance and Len­ovo gained at least 2.2 per­cent. A mea­sure of main­land fi­nan­cial com­pa­nies erased gains af­ter peo­ple with knowl­edge of the mat­ter said State­backed funds had sold bank shares on Tues­day.

Hong Kong’s bench­mark eq­uity in­dex has ad­vanced 26 per­cent from its Fe­bru­ary low, one of the world’s best per­for­mances, as fears of a hard land­ing re­ceded on the main­land and Hong Kong’s prop­erty mar­ket sta­bi­lized amid an im­prov­ing in­ter­est-rate out­look.

The an­nounce­ment of a long-an­tic­i­pated ex­change link with Shen­zhen this week and­bet­ter-than-ex­pected cor­po­rate prof­its have given ex­tra vigor to the rally, even as tech­ni­cal in­di­ca­tors flash a warn­ing that gains may be over­heat­ing.

“There’s a eu­pho­ria,” said Fran­cis Lun, chief ex­ec­u­tive of­fi­cer at Geo Se­cu­ri­ties Ltd in Hong Kong. “Given the eco­nomic con­di­tions, in­vestors were not ex­pect­ing too much from earn­ings.”

Ten­cent jumped 5.2 per­cent, tak­ing its 2016 rally to 33 per­cent, the most among Hang Seng In­dex con­stituents. Sec­ond-quar­ter sales and profit beat an­a­lysts’ es­ti­mates as the op­er­a­tor of the WeChat and QQ so­cial net­work ser­vices splashed out on mo­bile games and con­tent. Ping An, China’s sec­ond­largest in­surer, ad­vanced 2.5 per­cent af­ter say­ing its firsthalf profit rose 18 per­cent.

Len­ovo climbed 2.2 per­cent. The world’s big­gest PC maker posted a 64 per­cent gain in first-quar­ter profit as it cut costs and was helped by new Mo­torola smart­phone mod­els.

China Uni­com (Hong Kong) Ltd jumped 7.7 per­cent, the big­gest gainer on the Hang Seng In­dex, even as its first-half net in­come tum­bled 80 per­cent. Chief Ex­ec­u­tive Of­fi­cerWang Xiaochu said the worst will soon be over for the com­pany and that profit is likely to rise in the first half of next year.

Cathay Pa­cific Air­ways Ltd slumped for a sec­ond day af­ter its first-half profit tum­bled 82 per­cent. Swire Pa­cific Ltd, a con­glom­er­ate that owns a con­trol­ling stake in the air­line, slid 2 per­cent af­ter re­port­ing a fall in its hal­fyearly earn­ings.

The Hang Seng In­dex climbed to 23,023.16. The gauge’s 14-day rel­a­tive strength in­dex was at 70.8 at Thurs­day’s close, above the thresh­old of 70 that sig­nals to some traders that a rally is about to re­verse. The Hang Seng China En­ter­prises In­dex in­creased 0.1 per­cent.

The Shang­hai Com­pos­ite slipped 0.2 per­cent at the close.

the gain in the Hang Seng In­dex on Thurs­day

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.