Hong Kong stocks could start the week lower on Monday on speculation Chinese policymakers may become more cautious over any further stimulus measures after fresh data over the weekend showed that home prices in most Chinese cities had been rebounding after two interest rate cuts since June.
China’s statistic bureau data showed on Saturday that the nation’s new-home prices rose in as much as 50 of the 70 cities tracked by the government from a month earlier, the largest number since May, 2011.
Meanwhile, corporate profitability will continue to stay in the spotlight, with Tingyi (Cayman Islands) Holding Corp. (0322.HK ), Chinese power producers Datang International Power Generation Co., Ltd. (0991.HK ) and China Resources Power Holdings Co., Ltd. (0836.HK ) among a batch of firms due to post earnings reports later in the day.
China Pacific Insurance (Group) Co. Ltd. (2601.HK ), the nation's third largest insurer, said on Monday morning that its net profit slumped by 54.6 per cent in the first half of the year, as revenue from investment decreased and business growth slowed down.
Last Friday, German Chancellor Angela Merkel’s firm backing for the European Central Bank to ease crisis helped send the Hang Seng Index to return above the 20,000 level, trimming weekly losses to only 0.1 per cent. The gauge closed last week at 20,116.07, while the Hang Seng China Enterprises Index closed at 9,831.12 on Friday.
Short selling interest accounted 10.44 percent of the total turnover on Friday in Hong Kong, higher than the historical 8 percent average.
Investors are waiting for more hints on whether there would be further stimulus measures from the US Federal Open Market Committee, which is due to release the minutes of its latest regular meeting on Wednesday. Meanwhile, they are waiting for more signals from China over the timing for further cut in reserve requirement ratio or interest rate.
Factors to watch:
-- China Merchants Bank Co., Ltd. (3968.HK ), the nation’s sixth-largest lender by assets, said after market closed on Friday that its net profit for the six months ending June 30 totaled 23.4 billion yuan, up 26 percent from a year earlier.
-China Resources Land Ltd. (1109.HK ), the second-biggest Hong Kong-listed mainland property developer by market capitalization, said its full-year net profit ending June increased slightly by 2.2 per cent to HK$3.69 billion after market close on Friday.
- Towngas China Co. Ltd. (1083.HK ) posted HK$357 million net profit for the first-half ending June on Friday, up 18.1 per cent from a year earlier.
- Chinese gold miner Zhaojin Mining Industry Co. Ltd. (1818.HK ) said its net profit shed by 31 per cent from a year earlier in the first half to 495.4 million yuan.
- Goodbaby International Holdings Ltd. (1086.HK ) said its first-half net profit went down by over 12 percent to around 100 million yuan.
- Chongqing Rural Commercial Bank Co., Ltd. (3618.HK ) said first-half net profit grew by 25.3 percent year-on-year to 2.8 billion yuan.