Chi­naHshares ad­vance due to fac­tory data


Chi­nese stocks in Hong Kong gained the most since Oct 24 af­ter two man­u­fac­tur­ing read­ings jumped to twoyear highs, boost­ing the out­look for the world’s sec­on­de­con­omy.

The Hang Seng China En­ter­prises In­dex closed 1.5 per­cent higher. China Shen­hua En­ergy Co ral­lied the most in eight months, as the im­prov­ing eco­nomic pic­ture bol­stered the out­look for com­mod­ity prices. Sands China Ltd led gains by casino op­er­a­tors, af­ter Ma­cao gam­bling rev­enue climbed to the high­est level in al­most two years. COFCO Meat Hold­ings Ltd tum­bled in its trad­ing de­but. The Shang­hai Com­pos­ite In­dex added 0.7 per­cent.

The fac­tory data lifted shares in Hong Kong a day af­ter the city’s bench­mark stock in­dex capped its worst monthly loss since Fe­bru­ary. The Hang Seng In­dex de­clined 1.6 per­cent in Oc­to­ber as main­land flows into the city through an ex­change link with Shang­hai dried up and in­vestors boosted bets on higher US bor­row­ing costs.

“The mar­ket has turned more pos­i­tive and con­fi­dent that main­land’s econ­omy will sta­bi­lize in the fourth quar­ter,” said Li­nus Yip, a Hong Kong­based strate­gist at First Shang­hai Se­cu­ri­ties Ltd. “Af­ter a correction in Hong Kong and be­ing at a rel­a­tively low level, the mar­ket needed some stim­u­lus to gain power and the main­land fig­ures helped trig­ger that.”

The Hang Seng China En­ter­prises In­dex climbed to 9,706.20, with a gauge of 50-day volatil­ity ris­ing to the high­est since Aug 22.

The Hang Seng In­dex gained 0.9 per­cent in its first ad­vance in six days. Main­land in­vestors sold a net 729 mil­lion yuan ($108 mil­lion) of Hong Kong shares on Mon­day, the most since July 2015. The sell­ing con­tin­ued on Tues­day, with the net fig­ure stand­ing at 545 mil­lion yuan.

China’s man­u­fac­tur­ing pur­chas­ing man­agers in­dex rose to 51.2 in Oc­to­ber, the Na­tional Bu­reau of Sta­tis­tics said, com­pared with a me­dian es­ti­mate of 50.3 in a sur­vey of economists and a Li­nus Yip, read­ing of 50.4 in the prior two months. The pri­vate Caixin ver­sion of the gauge was 51.2, bet­ter than Septem­ber’s 50.1.

Shen­hua En­ergy jumped 6.4 per­cent, tak­ing its gain for the year to 41 per­cent, the big­gest on the H-share in­dex. China raised trans­ac­tion fees for ther­mal coal fu­tures for a third time in a week af­ter the na­tion’s bench­mark spot price in­creased to the high­est level in more than four years. Deutsche Bank AG an­a­lyst James Kan wrote in a note that coal prices may con­tinue ris­ing in the fourth quar­ter.

Sands China jumped 2.8 per­cent, the most in more than a month. Gal­axy En­ter­tain­ment Group Ltd ad­vanced 2.2 per­cent, while Wynn Ma­cao Ltd gained 1.2 per­cent.

Ma­cao’s gross gam­ing rev­enue rose 8.8 per­cent from a year ear­lier, ac­cord­ing to Ma­cao’s Gam­ing In­spec­tion and Co­or­di­na­tion Bu­reau, ex­ceed­ing an­a­lyst’s es­ti­mates for a 5.5 per­cent in­crease. Oc­to­ber fig­ures are typ­i­cally higher due to a week­long Chi­nese pub­lic hol­i­day.

China Com­mu­ni­ca­tions Con­struc­tion Co added 3.8 per­cent, while China Rail­way Group Ltd rose 3.3 per­cent. In­vestors have been bet­ting that the coun­try’s de­ci­sion­mak­ers will fa­vor in­fra­struc­ture projects and fis­cal spend­ing to counter the slow­est eco­nomic ex­pan­sion in more than two decades.

The mar­ket has turned more pos­i­tive and con­fi­dent that main­land’s econ­omy will sta­bi­lize in the fourth quar­ter.”

a Hong Kong-based strate­gist at First Shang­hai Se­cu­ri­ties Ltd

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