Hong Kong-listed en­ergy com­pa­nies surge


Hong Kong stocks rose for a third day as en­ergy com­pa­nies surged af­ter OPEC agreed to a pre­lim­i­nary deal that will cut out­put for the first time in eight years. At the same time, prop­erty de­vel­op­ers re­treated.

The Hang Seng In­dex climbed 0.5 per­cent at the close. CNOOC Ltd and China Petroleum & Chem­i­cal Corp ad­vanced at least 4 per­cent, while China Oil­field Ser­vices Ltd jumped the most since Oc­to­ber, af­ter US crude held near $47 a bar­rel. A gauge of real es­tate com­pa­nies dropped 0.4 per­cent, led by China Re­sources Land Co. Hsin Chong Group Hold­ings Ltd plunged by a record as shares re­sumed trad­ing af­ter Anony­mous An­a­lyt­ics rated it a “strong sell.” The Shang­hai Com­pos­ite In­dex ad­vanced 0.4 per­cent.

The Or­ga­ni­za­tion of Petroleum Ex­port­ing Coun­tries SamChi Yung, agreed to trim pro­duc­tion fol­low­ing an in­for­mal meet­ing in Al­giers. Con­cern over a global glut has weighed on crude prices for at least the past two years. The Hang Seng In­dex has gained 14 per­cent this quar­ter, Asia’s big­gest ad­vance, as main­land in­flows swelled via an ex­change link with Shang­hai and traders scaled back bets for higher US bor­row­ing costs. Main­land mar­kets will be shut next week for hol­i­days.

“In the short term oil prices will sup­port en­ergy stocks,” said Sam Chi Yung, se­nior strate­gist at South China Fi­nan­cial Hold­ings Ltd in HongKong. “Since China hol­i­days are com­ing up and the stock con­nect is closed, Hong Kong mar­ket’s turnover will be slow in gen­eral.”

The Hang Seng In­dex rose to 23,739.47, while the Hang Seng China En­ter­prises In­dex climbed 0.8 per­cent, ex­tend­ing its quar­terly gain to 12 per­cent.

The Shang­hai Com­pos­ite In­dex has ad­vanced just 2.4 per­cent in the pe­riod. Trad­ing vol­ume on the CSI 300 In­dex was 37 per­cent be­low the 30-day av­er­age for this time of day.

Net buy­ing of Hong Kong shares through a link with Shang­hai to­taled 58.7 bil­lion yuan ($8.8 bil­lion) this month, com­pared with pur­chases of just 1.75 bil­lion yuan in the other di­rec­tion. That’s helped nar­row a val­u­a­tion gap be­tween dual-listed shares in­HongKong andChi­nese main­land ex­changes to near the small­est since 2014. The con­nect is closed from to­day un­til Oct 11.

The Shang­hai Com­pos­ite will end the year at 3,075, ac­cord­ing to the me­dian fore­cast in a poll of 10 strate­gists and fund man­agers. That im­plies a 13 per­cent drop over the 12-month pe­riod, the steep­est in five years, and a gain of 2.9 per­cent fromWed­nes­day’s close. Fad­ing prospects for mone­tary eas­ing, a slow­ing econ­omy and the risk of high­erUS bor­row­ing costs spurring yuan weak­ness were among the fac­tors weigh­ing on the na­tion’s shares, the sur­vey showed.

Since China hol­i­days are com­ing up and the stock con­nect is closed, Hong Kong mar­ket’s turnover will be slow in gen­eral.” se­nior strate­gist at South China Fi­nan­cial Hold­ings Ltd

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