Stock Talk

Market Close: Hang Seng gains after China exports beat estimates

PUBLISHED : Thursday, 10 January, 2013, 4:41pm
UPDATED : Thursday, 10 January, 2013, 7:35pm

The Hang Seng Index on Thursday gained after China reported better-than-expected export figures, providing additional proof that the world’s second largest economy is on a firm track to recovery.

The benchmark Hang Seng Index added 135.84 points, or 0.59 per cent, to finish at 23,354.31. Turnover stood at HK$92.8 billion, the highest level since December 18 and short selling ratio stood at 7.2 per cent.

The Hong Kong share market surged 23 per cent last year amid signs that China’s economy is improving and liquidity is flowing into Hong Kong following the third round of US quantitative easing in September.

Trade data in December surprised on the upside by a big margin. Export growth jumped to 14.1 per cent year on year in December from 2.9 per cent in November, while import growth rose to 6.0 per cent from zero.

"We believe both export and import growth have truly bottomed out from lows in mid-2012, but we remain cautious on export growth on uncertainties and weakness in the US, euro zone and Japan," said Bank of America Merill Lynch China economist Lu Ting.

Matthew Sutherland, Fidelity’s head of product management for Asia, expects a re-rating wave for Chinese firms to come as the economy recovers and some reforms could implemented by the nation’s new leadership. Earnings growth for MSCI China firms could be more than the censuses of 10 per cent, he said.

Ping An (2318.HK) lost 1.38 per cent to finish at HK$67.8 on speculation that the deal that HSBC selling its entire stake to Thailand’s Charoen Pokphand Group for US$9.4 billion could fail. Solar companies surged after China’s energy regulator said the nation planned to add 10 gigawatts of capacity this year. GCL-Poly Energy (3800.HK) gained 1.96 per cent to close at HK$2.08.

Automakers jumped after Ye Shengji, deputy secretary general of the state-backed China Association of Automobile Manufacturer said the nation’s auto sales could rise 5 per cent in 2013 and reach 20 million units. Great Wall Motor (2333.HK) added 1.34 per cent to finish at HK$26.4.