Hong Kong stocks rise on last trading day of the year, led by Geely and AIA

Hong Kong has ended the year as the best performer among the world’s major equity markets in 2017

PUBLISHED : Friday, 29 December, 2017, 1:20pm
UPDATED : Friday, 29 December, 2017, 9:39pm

Hong Kong stocks rose for a fifth day on the last trading day of 2017, ending up the year as the best performer among the world’s major equity markets, as the biggest annual gainers including Geely Automobile Holdings and AIA Group extended gains.

The Hang Seng Index rose 0.2 per cent, or 55.44 points, to 29,919.15 at the close. The Hang Seng China Enterprise Index, or the H-share gauge, also added 0.2 per cent. The mainland’s stock benchmark also rose to reclaim the 3,300-point ground and finished the year in a positive territory.

Trading volumes on the Hong Kong exchange were 42 per cent below the 30-day average, according to Bloomberg data.

The city’s benchmark of 51 blue-chip companies advanced 36 per cent this year, outpacing the 26 per cent gain on the Dow Jones Industrial Average and the 19 per cent advance on the Nikkei 225 index.

The buying from mainland traders through the exchange links with the Shanghai and Shenzhen ourses has mainly been stoking the rally in Hong Kong equities this year, at one point sending the Hang Seng Index to a decade-high of 30,003.49 last month.

“Looking at 2018, Hong Kong stocks will probably continue to climb and outperform mainland equities, as global liquidity is favourable for stocks,” said Chen Hao, a strategist at KGI Securities in Shanghai. “But the number of interest rate increases by the Federal Reserve next year remains the market’s major uncertainty.”

The year’s best-performing stocks led the gainers on Friday. Geely Auto, which owns Volvo, rose 1.9 per cent to HK$27.10. AIA rallied 2.2 per cent to HK$66.65 and China Mengniu Dairy added 0.4 per cent to HK$23.25.

Geely has surged 266 per cent this year, the biggest gainer on the Hang Seng Index, as earnings accelerated and exceeded analysts’ estimates. China Mengniu and AIA have jumped at least 52 per cent.

Macau’s casino stocks rose before the release of the city’s gross gaming revenues for the month. Galaxy Entertainment Group added 1.1 per cent to HK$62.70 yuan and SJM Holdings rose 1.5 per cent to HK$7.

But the number of interest rate increases by the Federal Reserve next year remains the market’s major uncertainty
Chen Hao, KGI Securities

In the mainland, the Shanghai Composite Index added 0.3 per cent, or 10.79 points, to 3,307.17. The CSI 300 Index of big-cap shares also gained 0.3 per cent.

The Shanghai Composite ended the year with a 6.6 per cent gain, while the CSI 300 rose 22 per cent, as investors switched to larger companies amid financial deleveraging.

Banks advanced on Friday after the People’s Bank of China said almost at the close of morning trading that it would allow some lenders to temporarily use two percentage points of their reserve requirement to alleviate liquidity shortage during the Chinese New Year period, when demand for cash typically spike as companies pay employees bonuses and salaries.

China Construction Bank rose 1.7 per cent to 7.68 yuan. Bank of Beijing climbed 1.4 per cent to 7.15 yuan and China Merchants Bank also added 1.4 per cent to 29.02 yuan.

Fiery liquor giant Kweichow Moutai slid 3 per cent to 697.49 yuan after surging 8.2 per cent a day earlier on an announcement to raise product prices by 18 per cent. The stock surged 109 per cent in 2017.