HK Stocks Rebound From Seven-Week Low as Ping An Advances

11-Jul-2017 Intellasia | Bloomberg | 6:00 AM Print This Post

Hong Kong stocks rose, with the benchmark index climbing from a seven-week low, as Ping An Insurance Group Co. led a rally by financial shares and Orient Overseas International Ltd jumped after being targeted for a takeover.

The Hang Seng Index advanced 1 percent to 25,585.99 at 11:36 a.m. local time. Ping An Insurance rose 2.7 percent to a June 2015 high, while China Life Insurance Co. climbed 2.5 percent. Orient Overseas surged 19 percent after Cosco Shipping Holdings Co. said it would buy the container carrier for $6.3 billion. Cosco Shipping added 5.9 percent to the highest since December 2015. The Shanghai Composite Index declined 0.2 percent at the local midday trading break.

The rebound in the Hong Kong benchmark follows its worst week since March and Friday’s increase in US equities spurred by broad-based American payroll gains. The gauge has rallied 16 percent this year, though further gains may be capped by further tightening by the US Federal Reserve.

“It looks like a technical rebound after losses in the past few days, while the Cosco-Orient Overseas deal also lifted sentiment,” said Banny Lam, head of research at CEB International Investment Corp in Hong Kong. “Turnover is still low, so it remains to be seen if the gains will sustain into the week.”

China’s producer price gains held up, signaling that demand in the world’s second largest economy could remain robust even in the face of regulatory curbs. The producer price index rose 5.5 percent in June from a year earlier, compared with an estimated 5.5 percent in a Bloomberg survey, which was also the reading in May. The consumer price index increased 1.5 percent, versus a forecast of 1.6 percent, the nation’s statistics bureau said Monday.

Wanda Hotel Development Co. surged as much as 155 percent in Hong Kong on 86 times the three-month full-day average volume after its ultimate parent Wanda Group said it plans to sell hotel assets to Sunac China. A Wanda Hotel Development Co. representative said the deal announced between its parent group and Sunac China Holdings Ltd has no direct impact on Wanda Hotel, the Hong Kong-listed company. Shares have since pared gains to 83 percent.

Link REIT advanced 3.1 percent after UBS Group AG raised its rating on the stock and boosted the price target to 19 percent above Friday’s close.


Category: Hong Kong

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