Hong Kong stocks cap fourth week of gains

Hong Kong stocks closed higher on Friday, capping a fourth week of gains, as casino operators advanced after Macau’s gaming revenues beat market expectations.

At the same time smaller companies led mainland stocks to reverse earlier losses, as the ChiNext gauge of small-cap shares rebounded after touching a 28-month low.

The Hang Seng Index gained 0.4 per cent, or 114.83 points, to close at 25,924.05, the highest finish since July 3, 2015. For the week, it advanced 1.1 per cent, capping its fourth consecutive weekly gain. The Hang Seng China Enterprises Index, which tracks the performance of Chinese companies listed in Hong Kong, also added 0.4 per cent, or 46.55 points, to end at 10,666.43.

“The [Hang Seng] index will continue to trade around the 25,800 level,” said Louis Tse Ming-kwong, a director of VC Brokerage. “The psychological level is 26,000. The index will see a major resistance at 26,200.”

Tse said the recent gains were fuelled by a stronger yuan and optimism that mainland shares might be added to MSCI’s emerging-market index later this month.

The Hang Seng Index has climbed 18 per cent this year, while the mainland’s benchmark Shanghai Composite Index has added just 0.1 per cent as a government-led financial deleveraging weighs on equities.

Still, Hong Kong stocks are 18 per cent cheaper than mainland shares, according to a measure tracking the price gap between the two markets.

Casino operators mostly advanced, after Macau reported a better-than-expected 24 per cent year-on-year increase in gambling revenues for May. Sands China rose 1.3 per cent to HK$35.1 and Galaxy Entertainment added 0.9 per cent to HK$45.35.

Hong Kong Exchanges and Clearing jumped 4.2 per cent to HK$205. The bourse will publish a consultation in two weeks about launching a new Third Board that could allow more technology firms to list here, HKEX’s chief executive Charles Li Xiaojia said on Friday.
HKEX to launch Third Board consultation in two weeks

Another gainer was Greatview Aseptic Packaging Company, which soared 17 per cent to HK$5.08.

Cogobuy, an e-commerce platform for electronic goods, rebounded 16 per cent to HK$5.09 following a two-day plunge. However, Chinese Internet Giant Tencent Holdings reversed an early advance to close down 0.4 per cent at HK$270.

In mainland trading, the ChiNext index gained 1 per cent to 1,745.93, erasing an early loss after sliding to the lowest level since February 2015. The benchmark Shanghai Composite Index rose 0.1 per cent to 3,105.54, ending the week with a 0.2 per cent gain.

Inspur Software surged 5.1 per cent to 21.11 yuan in Shenzhen and East Money Information gained 5.8 per cent to 12.13 yuan.

Hunan Kaimeite Gases surged by the 10 per cent daily limit to 8.86 yuan after the company chairman called on all employees to buy its own stocks, given sound corporate fundamentals and the recent irrational decline on the market.

However, SF Holdings fell in Shenzhen after the courier service firm beceme entangled in a data-sharing dispute with Cainiao, a logistics arm of e-commerce giant Alibaba Group.

Courier service firm SF Holdings, owned by tycoon Wang Wei, lost 1.3 per cent to 53.29 yuan. Alibaba’s Cainiao said Thursday that it had told merchants to select other couriers after SF Express stopped data-sharing.

Meanwhile, SF Holdings said in a statement that Cainiao had ceased sharing data with the company at first. SF expected the spat to have limited impact on its financial performance this year.

Three companies soared on their trading debuts in the mainland market. Jiangsu Leili Motor, a distributor and manufacturer of motors and other automotive equipment, rose 44 per cent from an initial public offering price to 72.24 yuan in Shenzhen.

Nanjing Huamai Technology Co., a manufacturer of phone equipment, jumped by its 44 per cent allowable limit to 16.21 yuan in Shanghai and Xiamen Yanjan New Material Co., which makes special film products, also gained 44 per cent to 27.95 yuan.
With additional reporting by Josh Ye.