Stock Talk

Market Wrap: Hong Kong stocks rise on A share optimism; China carmakers jump

PUBLISHED : Friday, 05 October, 2012, 4:33pm
UPDATED : Friday, 05 October, 2012, 4:47pm

Hong Kong stocks rose slightly on growing optimism that China’s onshore market may open higher next Monday after shutting down for one-week national holiday.

Meanwhile, they are also being buoyed by the latest comments from European Central Bank President Mario Dragh, who said on Thursday after the ECB's meeting that the central bank was ready to start purchasing bonds issued by debt-ridden countries.

Traders are also preparing for US non-farm payroll data tonight, which is expected to show unemployment rose slightly to 8.2 per cent in September, from 8.1 per cent in August, according to economists polled by Reuters.

“Investors are speculating some key favourable policies (in China) will be rolled out after the National Day holidays, since the time for the key 18th National Congress of the Communist Party has been settled,” said Patrick Yiu, Managing Director at CASH Asset Management.

The benchmark Hang Seng Index gained 104.43 points, or 0.50 per cent, to finish at 21,012.38. The Hang Seng China Enterprises Index, which tracks Hong Kong-listed Chinese companies, gained 116.65 points, or 1.18 per cent, to end at 9,965.18.

Financial players, especially Chinese insurers which have dual-listings in Hong Kong and China, led the gains. Ping An Insurance (2318.HK) gained 1.69 per cent to finish at HK$60.15. 

Chinese carmakers rose sharply in the Hong Kong market on Friday, on speculation that rising hostility to Japanese car brands in China will boost sales of home-grown vehicles.

Brilliance China Automotive (1114.HK), the Chinese partner of German luxury auto giant BMW, gained 5.93 per cent to close at HK$9.11. Brilliance China rose as high as HK$9.16 this morning, its highest level in nearly eight months.

BMW said on Friday that its sales in China surged by 55 per cent year-on-year to around 27,000 units in September. January to September accumulated sales in the nation rose 32.7 per cent from a year earlier to 219,800 units.

Great Wall Motor (2333.HK), China's largest maker of SUVs and pickup trucks, jumped by 5 per cent to finish at HK$21.00.

Toyota Motor’s China sales fell about 40 per cent in September from the year before, Reuters reported on Friday. Toyota is due to report on China sales on Tuesday. The plunge in demand for Japanese vehicles has boosted other foreign brands, with South Korea’s Hyundai saying on Friday that its China sales climbed 15 per cent to 84,188 vehicles last month.

Hong Kong retailers retreated after the city’s August retail sales came at a disappointment. Jewellers led the declines, as data released on Thursday revealed that total retail sales of jewellery, clocks, watches and other valuables fell by 3.4 per cent in Hong Kong in August, bigger than declines in retail sales of other type of goods.

Luk Fook (0590.HK) lost 2.7 per cent to finish at HK$23.45, while watch retailer Hengdeli Holdings (3389.HK) lost 1.79 per cent to finish at HK$2.20.

Li & Fung Ltd (0494.HK) added 2.56 per cent to finish at HK$12.04. The global supplier of apparel is in advanced talks to buy Synergies Worldwide, a small, New York-based supplier, Reuters reported Thursday, citing a source familiar with the matter.