Update | Hong Kong stocks post best weekly performance in three months as developers rally

Hong Kong stocks rose, with the Hang Seng Index capping its biggest weekly gain in almost three months, as Country Garden Holdings led the advance along with other mainland property developers.

The city’s benchmark equity gauge added 0.7 per cent, or 210.95 points, to 29,578.01 at Friday’s close, extending the gain to 2.5 per cent this week. The Hang Seng China Enterprises Index, known as the H-share gauge, edged up 0.5 per cent. The mainland’s Shanghai Composite Index fell slightly on declines in liquor distillers and insurers, the year’s best-performing sectors.

Trading was light before the Christmas holidays, with volumes at 46 per cent below the 30-day average on Friday. Hong Kong’s market will be closed on Monday and Tuesday for the public holidays. The Hang Seng Index has rallied 34 per cent this year, poised to become the best performer among major stock markets globally.

Country Garden and mainland-based property developer resumed their run-up on expectations of strong earnings growth this year. Government-directed de-stocking of housing inventories mainly in China’s third- and fourth-tier cities has propped up sales of the Hong Kong-listed developers, according to Dai Ming, a fund manager at Hengsheng Asset Management in Shanghai. The shares of Country Garden has more than tripled this year as semi-annual sales increased at least 20 per cent for each of the six-month period over the past five years.

“It’s a valuation recovery for Hong Kong-listed mainland developers,” said Dai. “They have recovered from the much beaten-down valuations and the pickup in earnings has stoked the rally in the sector this year.”

Country Garden rose 2.6 per cent to HK$13.40. Sunac China Holdings climbed 3.2 per cent to HK$30.25 and China Vanke surged 4.5 per cent to HK$29.95.

China Resources Land gained 1.8 per cent to HK$22.15 and China Overseas Land & Investment finished 1 per cent higher at HK$24.40.