Stock Talk

Market Wrap: Hang Seng breaches 22,000 as A-shares rebound

PUBLISHED : Friday, 30 November, 2012, 4:40pm
UPDATED : Friday, 30 November, 2012, 4:57pm

The Hang Seng breached the key level of 22,000 for the first time since November 7, led by property and energy companies, as the onshore market snapped a 4-day losing streak and investors build positions ahead of the official manufacturing data.

“Sentiment in Hong Kong largely depends on the performance of A-shares,” said William Fong, who oversees US$62 million for Barrings Asset. “We believe this is already the bottom for A-shares and it shouldn’t get any worse than the current level. Thus, it is a good time to build position in some underperformed sectors, such as non-food consumers, developers and basic materials.”

The benchmark Hang Seng Index added 0.49 per cent to finish at 22,030.39. Turnover jumped to HK$80 billion, compared with a 30-day average of around 53 billion.

Chinese developers, which are trading at around 30 per cent discount to net asset value on average, advanced strongly as fund mangers built positions at year-end betting the nation’s home prices would stabilise next year after a three-year curb in the industry.

Guangzhou R&F Properties (2777.HK) surged 7.48 per cent to finish at HK$13.22. CNOOC (0883.HK), the nation’s biggest offshore energy producer, added 1.21 per cent to finish at HK$16.58.

The Shanghai Composite Index finished 16.63 points, or 0.85 per cent higher, to stand at 1980.12 – rebounding from a four-year low seen on Thursday’s close.

Chong Hing Bank (1111.HK), the local lender controlled by the Liu family, surged 13 per cent after jumping by 11 per cent on Thursday. The stock finished at HK$17.06 on Friday.

A trader at a major local brokerage said speculation Chong Hing could be acquired by a mainland financial institution is spiralling after the bank appointed a non-family member as its chief executive for the first time since the bank was founded.

“Its peer Wing Lung was sold at around 135 per cent premium to its net asset value. The Liu family would consider a sale if there is a good offer like that, given the weak fundamentals of the bank,” said the person who disclosed to be named.

Hong Kong Exchanges & Clearing (0388.HK) lost 0.8 per cent to finish at HK$123.8, after it said it is selling US$1 billion in new shares to fund its purchase of the London Metal Exchange.