HONG KONG’S benchmark Hang Seng Index rose 2.5% this week, following an even larger 2.8% jump last week and a whopping 3.9% the week before, to finish today’s trading up 0.47% at 24,396.07, with close correlation to the neighboring PRC markets and additional uplift from diminished concerns over the possibility of overzealous credit tightening from Beijing.
Today’s closing level approached a three-month high, with property developers finishing the week strong on lack of anxiety over rate action.
The holiday-shortened week began strong on Monday, with the Hang Seng Index rising 1.5%, boosted by Hong Kong-listed casino operators based in the neighboring gambling Mecca of Macau reporting strong revenue last month from rising visitor volume from the PRC.
The day’s trading was a good test of the autonomy of the Hong Kong capital market given the fact that bourses across the de factor border in Shenzhen and Shanghai were closed Monday and Tuesday to commemorate Tomb Sweeping Festival.
The Index was also spurred on by reports of a strong year for public listings in the Special Administrative Region (SAR) which boosted financial sector firms.
The upcoming 10 bln usd IPO plan by Swiss-based commodities trading giant Glencore International and plans to go public in Hong Kong by high-end fashion firm Prada also lifted spirits.
After Hong Kong, the PRC and Taiwan took Tuesday off for the holiday, the Hang Seng added another 0.56% on Wednesday to close at 24,285.05.
Some of the big movers were Tencent Holdings Ltd (HK: 700), operator of China’s top social networking portal QQ, which jumped 4.3% to 204.80 hkd on news that company CEO Ma Huateng sold two mln shares on Monday at just 67.81 hkd per share.
On Thursday, Hong Kong shares traded flat, inching down 0.01% at the 4:00 pm close to finish at 24,281.80, dragged down by selloffs in overbought large cap listcos.
The day’s closing bell status ended five consecutive trading days of increases, while the Shanghai Composite – the benchmark index tracking A and B shares in the PRC, hit a high for the year 2011.
Despite falls in Cheung Kong Holdings (HK: 1) and lender ICBC (HK: 1398), major PRC-based upstream petrochemical heavyweights CNOOC Ltd (HK: 883) and Sinopec Corp (HK: 386) each added around 1.5% on Thursday after economic regulators said petrol and diesel prices touched record highs the previous trading day.
Analysts said that upstream petroleum firms would likely continue to benefit from rising crude prices this year while downstream powerhouse Petrochina would continue to feel the pinch.
And trading today saw the Hang Seng Index add another 0.5% to close at 24,396.07 as investors brushed aside concerns of additional interest rate hikes despite Beijing’s repeated warnings that it was taking the specter of worsening inflation seriously.
Real estate firms, one of the heaviest index weightings in Hong Kong, rebounded from corrections on Thursday and general optimism about the continued availability of affordable credit.
Developer Cheung Kong added 1.2% on Friday to finish at 130.10 hkd.
Local rival Sun Hung Kai Properties (HK: 16) finished up 0.7% at 128.20 hkd on the day.
Looking ahead
Market watchers expect Hong Kong shares to trend higher next week, moving within the 24,000 to 24,800-level range thanks to more investment flows entering the capital markets due in part to a stronger Hong Kong currency, and a lack of concern about further action from the People’s Bank of China.
Reports say some 40 bln yuan is sitting in fund accounts ready to enter the stock market over the short term, which should help ease anxiety over possible liquidity crunches amid upcoming IPOs.
See earlier: HK WEEKLY WRAP: Hang Seng Up 2.8% On Rosy Results
