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Hong Kong stocks end higher; Sunny Optical rockets on positive profit guidance

The Hang Seng Index edges up 0.2 per cent to 26,524.94, while the

Shanghai Composite Index rises 0.3 per cent to 3,187.57

PUBLISHED : Tuesday, 18 July, 2017, 9:24am
UPDATED : Tuesday, 18 July, 2017, 10:39pm

Hong Kong shares continued to rise on Tuesday, driven by Chinese insurers and as Sunny Optical surged to a record high after the lens manufacturer issued a positive profit alert.

The Hang Seng Index rose 0.2 per cent, or 54.36 points, to 26,524.94. The Hang Seng China Enterprises Index, also known as the H-share gauge, lost 0.3 per cent, or 27.91 points, to 10,755.28.

Ping An was the most active stock, gaining 0.4 per cent to HK$58.75 while Tencent rose 0.6 per cent to HK$286.8.

Sunny Optical, which makes handsets, digital cameras, vehicle imaging systems and security surveillance systems, advanced 16.88 per cent to a record high of HK$92.45 after the lens manufacturer issued a positive profit alert, predicting an increase of more than 120 per cent in profit attributable to its shareholders during the first half.

China Vanke, the nation’s biggest property developer, was little changed at HK$23.2. On Monday night Vanke said it led a consortium in a buyout offer for Global Logistics Properties, the country’s largest operator of warehouses.

The Shanghai Composite Index rose 0.3 per cent, or 11.10 points, to 3,187.57 while the CSI 300 — which tracks large companies listed in Shanghai and Shenzhen — increased 0.1 per cent or 3.62 points to 3,667.18.

The Shenzhen Composite Index tacked on 0.6 per cent or 10.79 points to 1,811.33 while the Nasdaq style ChiNext rose 0.7 per cent or 11.06 points to 1,667.49.

However investors may turn cautious ahead of the two-day Fed meeting from July 25 and as Sunac China tumbled amid speculation that the property developer was undergoing loan checks by banks.

“Investors are wary of China’s policies to check companies which have been making overseas acquisitions aggressively,” Linus Yip chief strategist for First Shanghai Securities said. “But it’s not turning into a systemic problem yet, or that liquidity tightening is spreading, so market performance is still solid.”

Jiemian.com, a business news website run by Shanghai United Media Group, reported that Sunac China is undergoing a credit inspection by a commercial bank over its debt levels following its US$9.3 billion asset purchase from Wanda Group.

Explainer: Here’s what’s in Wanda and Sunac after China’s largest single property deal

Earlier this month, Anbang, Fosun and HNA Group in addition to Wanda were reported to be placed under regulatory scrutiny by the China Banking Regulatory Commission, which ordered banks to check their offshore exposures to these companies and causing their shares to plummet.

On Tuesday, Sunac China, which is controlled by tycoon Sun Hongbin, plunged 7.2 per cent to HK$15.96 and Wanda Hotel Development slid 6.25 per cent to HK$0.6. Fosun International shed 2 per cent to HK$11.64. Shanghai Fosun High-Technology (Group) a wholly owned subsidiary of Fosun International announced on July 18 that it has issued 2 billion yuan worth of AAA-rated short term notes on the domestic inter-bank bond market. The issue was 2 times oversubscribed.

On Monday, mainland Chinese stocks suffered a sharp sell-off that dragged nearly 500 companies down by their daily 10 per cent limit after President Xi stressed the importance of financial security at the weekend’s financial work conference, triggering concerns of the health and liquidity of smaller Chinese companies.

Shanghai Fosun Pharmaceutical, an affiliate of Fosun Group, slid 5.7 per cent to 28.22 yuan.

Fosun Group has made a slew of high-profile overseas acquisitions in recent years.





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