Hang Seng, China shares see tepid rebound
Hong Kong and China shares rebounded from a one-week low on Wednesday in weak volume, with investors mainly focused on a handful of stocks on hopes of an earnings turnaround.
The Hang Seng Index gained 0.5 per cent to 23,044.2 points after closing on Tuesday at its lowest since May 6. The China Enterprises Index of the top Chinese listings rose 0.5 per cent.
The CSI300 of the leading Shanghai and Shenzhen A-share listings closed up 0.5 per cent at 2,506.9 points. The Shanghai Composite Index, which ended Tuesday at its lowest since May 3, inched up 0.4 per cent.
Volume in Shanghai neared 2013 lows, while Hong Kong turnover was just shy of its average in the past month as the official China Securities Journal reported that Premier Li Keqiang warned that the Beijing had limited scope to ease policy to spur the economy.
“I think people are still quite complacent in the equity markets, the official tolerance for a China growth slowdown is substantially higher than what people think,” said Hong Hao, chief strategist at Bank of Communication International Securities.
Growth-sensitive counters such as China Coal were among the bigger underperformers, diving 5.6 per cent in Hong Kong, while sliding 0.8 per cent in Shanghai.
SJM climbed 4.9 per cent to a record closing high after the Macau casino operator said at midday the Macau government had given it the go-ahead for a project on the Cotai strip in the gambling hub.
Global supply chain manager Li & Fung surged 8.4 per cent in its best daily gain since November 2011 after Hong Kong media reported that Chairman William Fung said 2013 earnings would return to 2011 levels as most performance targets have been met.
Shares of the supply chain manager for Walmart Stores and Target were also helped by an upgrade by UBS analysts from “sell” to “neutral”, assuming a lower settlement of payables for the company.
Its shares are still down 18.4 per cent on the year, among the worst performing Hang Seng Index components, compared to a 1.7 per cent rise on the benchmark. UBS said its corporate earnings for the first half, due in August, will be an important determinant of any recovery.
ANTA Sports soared 9.3 per cent as investors cheered its flat rate of same-store sales growth in the first quarter. The company had warned of negative figures for the first two months of the year while reporting its 2012 annual results.
ANTA Sports is now up more than 6 per cent in 2013. Its strong gains on Wednesday also lifted its Chinese sportswear sector rivals, including Li Ning, which rose 3.8 per cent to cut its 2013 losses to 18 per cent.
Sun-Art Retail gained 1.6 per cent after China’s largest hypermarket chain by market capitalisation said first-quarter net profit rose 16 per cent from a year earlier as it continued to expand into lower-tier Chinese cities.