appConfigEntityId

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

hooksArticlePageAdvertisementConfigArticle

liveArticle

appConfig

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

sectionsV2

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

json

SCMP Reporter

US, European officials may pressure mainland on currency in run-up to G7 ministers' meeting

The   Hang Seng Index gained  for the fifth consecutive day yesterday as confidence was  restored amid fresh  talk of a possible yuan appreciation and falling oil prices.

'Talk about increased pressure for the yuan to appreciate has resurfaced. Investors are expecting China to face pressure to revalue the yuan during the upcoming G7 meeting,' said Alex Tang Yee-yuk, the head of research at Core Pacific-Yamaichi International.

'Any talk of a yuan revaluation will definitely be positive for the Hong Kong market.'

Investors widely expect officials in the United States and Europe  to put pressure on China to allow more flexibility in the yuan exchange rate in the run-up to a meeting of the Group of Seven leading industrialised nations  on Friday and Saturday,  although mainland  officials have reiterated the timing is not right.

Brokers said falling oil prices after a smooth  election in Iraq also helped  restore investor confidence in key global markets.

Crude oil for March delivery fell  US$1.05 yesterday during Asia trading  to about  US$46.13 per barrel because of the Iraqi election.

The Hang Seng Index opened  at 13,581.19 points but quickly crept up to an intraday high of 13,762.86 before ending the day  at 13,721.69.

Shares worth $16.52  billion changed hands yesterday, compared with $3.93  billion last Friday.

The blue-chip index finished with a gain of 71.63 points, for a cumulative five-day increase of  334.7 points.

Most blue chips  edged up slightly, with Cosco Pacific, Cheung Kong Infrastructure and Denway Motors topping the list. Cosco Pacific rose 3.17 per cent,  followed by a 2.86 per cent  gain in Cheung Kong Infrastructure and a 2.67 per cent  rise in Denway.

H shares  finished firmer, boosted by expectations of strong earnings releases because of impressive gross domestic product  growth.

The H-share index edged up 9.64 points to close at 4,721.52.

Shares in Tsingtao Brewery, the country's largest brewer, rose 5.45 per cent  as the company said it produced 13 per cent more beer last year.

Beijing Capital Airport, Shenzhen Expressway and China Oilfield surged more than 4 per cent.

However, the nation's largest insurer, China Life Insurance, bucked the trend by falling  2.8 per cent,  after a strategic shareholder - widely speculated to be  Cheung Kong - cashed out $1.1 billion last Friday.

The unidentified China Life shareholder sold 214.2 million shares at $5.15 each, at the  bottom end of the indicative price range of $5.15 to $5.30.

'All the concerns about liquidity flowing out that drove the Hong Kong market down at the beginning of the month have proved groundless,' Mr Tang said.

'This has triggered people to cover their short positions and fund managers to accumulate stocks.'

Mr Tang expects the blue-chip index to break through the 14,000-point and test 14,400  after the Lunar  New Year.

His  optimism was not shared.

'The market is cautiously positive, but still lacks momentum,' said Alex Wong Kwok-ying, a director of Rexcapital Asset Management.

Eddie Wong of ABN Amro downgraded the market and forecast the index  to fall to 12,000 before rising to 14,000 again.

'Don't be fooled by the lagging indicators for Hong Kong stock-market liquidity,' he said in a report.  'In the near term, we are particularly concerned about the liquidity outflow and the eventual interest-rate rise from the possible unwinding of the dollar carry trade and a counter-trend rally in the US dollar.'

He added  the latest rebound   was an  opportunity to reduce holdings.

Meanwhile, Advanced Semiconductor Manufacturing Corp  has received approval from  Hong Kong Exchanges and Clearing for its US$100 million to US$150 million  offering.

The chipmaker is planning to launch its public offering after the Lunar New Year.



Yuan talk, oil price falls fuel buying momentum