HK shares climb most in a month

China Daily (USA) - - BUSINESS - By BLOOMBERG

Hong Kong’s bench­mark eq­uity in­dex climbed the most in a month, with spec­u­la­tion that the US Fed­eral Re­serve may re­think any im­me­di­ate plans to raise bor­row­ing costs adding to op­ti­mism spurred by in­creas­ing prop­erty sales.

TheHang Seng In­dex added 1.7 per­cent, the most since July 12. A gauge of prop­erty stocks ad­vanced to a one-year high, with Sun Hung Kai Prop­er­ties Ltd and Sino Land Co lead­ing with gains of more than 3 per­cent each. The Shang­hai Com­pos­ite In­dex climbed for a sec­ond day, while a mea­sure of small-com­pany shares ad­vanced in Shen­zhen.

Hong Kong’s real es­tate mar­ket is es­pe­cially sen­si­tive to Fed mon­e­tary pol­icy, with a cur­rency peg to the green­back en­sur­ing the city’s in­ter­est rates fol­low that of theUS. The odds that the Amer­i­can cen­tral bank will in­crease bor­row­ing costs this month de­creased af­ter non­farm pay­rolls data re­leased on Fri­day missed es­ti­mates for Au­gust. At least one res­i­den­tial project in Hong Kong was sold out over the week­end, while data Fri­day showed home sales rose to the high­est level in at least 14 months in Au­gust.

“Hong Kong prop­erty sales are still pretty good and, with a lower in­ter­est-rate-hike pos­si­bil­ity in the US, prop­erty stocks may con­tinue their strength from Au­gust,” said Li­nus Yip, aHong Kong-based strate­gist with First Shang­hai Se­cu­ri­ties. “It’s a crit­i­cal mo­ment be­cause the Hang Seng In­dex shot up to new highs and has out­per­formed global mar­kets in Au­gust.”

The Hang Seng In­dex rose to 23,649.55. The Hang Seng China En­ter­prises In­dex climbed 1.5 per­cent, while the Shang­hai Com­pos­ite closed 0.2 per­cent higher. The ChiNext in­dex of small­com­pany shares ad­vanced 0.6 per­cent.

The 14-day rel­a­tive strength mea­sure for the Hang Seng Li­nus Yip, In­dex, mea­sur­ing how rapidly prices have ad­vanced or dropped dur­ing a spec­i­fied time pe­riod, was at 75.3 on Mon­day. Read­ings above 70 in­di­cate a pos­si­ble re­ver­sal. Sun Hung Kai Prop­er­ties rose 4.7 per­cent and Sino Land added 3.6 per­cent. Ten­cent Hold­ings Ltd rose 4.2 per­cent to a record, reach­ing a mar­ket value of HK$1.99 tril­lion ($256.5 bil­lion).

China Pa­cific In­sur­ance Group Co rose 2.7 per­cent and PICC Prop­erty & Ca­su­alty Co added 2.8 per­cent to lead in­sur­ers higher in­Hong Kong. Amer­i­can In­ter­na­tional Group Inc is look­ing to raise about $190 mil­lion by sell­ing its re­main­ing shares in PICC, ac­cord­ing to a media re­port.

Chi­nese in­sur­ance stocks may con­tinue to rise as firsthalf op­er­at­ing trends of both life and prop­erty-and-ca­su­alty busi­nesses were stronger than pro­jected, and earn­ings are ex­pected to im­prove, Dar­win Lam and Michelle Ma, an­a­lysts at Cit­i­group Inc, wrote in a re­port last week.

a Hong Kong-based strate­gist with First Shang­hai Se­cu­ri­ties

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