Hong Kong stocks advance 2.2 pc for the week on bullish earnings; Tencent results due Aug 16

Defence players surge amid China-India border tensions. Hang Seng Index edges up to 27,562. Cheung Kong Property surges 4.3pc after posting 67pc rise in H1 profit on Thursday

PUBLISHED : Friday, 04 August, 2017, 9:22am
UPDATED : Friday, 04 August, 2017, 9:51pm

Hong Kong stocks inched higher on Friday and notched a 2.2 per cent weekly advance on a spate of bullish earnings, extending a four-week bull streak, while investors looked ahead to the upcoming interim results of Tencent, one of China’s most valuable companies.

The Hang Seng Index ended up 0.1 per cent, or 31.67 points, to close at 27,562.68.

For the week, it rose 583 points, or 2.2 per cent, scoring a fourth straight week of gains.

So far this year, the index has jumped more than 24 per cent, one of the best performing stock indexes across the globe.

The Hang Seng China Enterprises Index ended Friday flat at 11,003.08 and posted a 2.3 per cent weekly gain.

Daily average turnover for the week surged 11 per cent to HK$92.2 billion (US$14.82 billion) from last week.

“Tencent’s earnings will be key to whether Hong Kong stocks can maintain their upward momentum for the rest of August,” said Chloe Chan, an analyst at Cinda International.

Tencent’s earnings will be key to whether Hong Kong stocks can maintain their upward momentum for the rest of August
Chloe Chan, an analyst at Cinda International

Internet giant Tencent, due to release first-half results on August 16, rose 0.9 per cent to close at HK$311.4. It was responsible for 27 points of gains in the Hang Seng Index, the biggest contributor.

At one point it touched a new all-time high of HK$317.8 earlier this week, sending its market cap briefly over HK$3 trillion.

Tencent is China’s second largest tech company by market cap, slightly behind New York-listed Alibaba, whose market value reached US$393 billion Thursday night.

Other than Tencent, several other corporate heavyweights are scheduled to unveil results later this month, including Hong Kong Exchanges & Clearings and China Mobile.

“The Hong Kong market has attracted continued fund inflows, particularly southbound flows from the mainland. Their favourites are big cap stocks with upbeat earnings,” Chan said.

“So corporate results should continue to move the market.”

HSBC rose 0.3 per cent to HK$78.5 on Friday. It gained 2.7 per cent for the week, after reporting better-than-expected results for the second quarter and a US$2 billion share buyback plan.

Cheung Kong Property surged 4.3 per cent to HK$67.8, after it posted a 67 per cent increase in first-half profit from a year earlier.

Nonetheless, CK Hutchison Holdings, the conglomerate controlled by Hong Kong tycoon Li Ka-shing, retreated 3.1 per cent after recent gains, as its first-half profit fell short of market estimates.

Among other market shakers, Geely Auto gained 4.3 per cent to HK$18.52. The car maker announced after the market closed that its subsidiaries Volvo Cars, Zhejiang Jirun, and Zhejiang Haoqing have agreed to form a joint venture to manufacture vehicles under the Link & Co brand. The vehicles will be equipped with engines developed by Volvo.

Defence shares also shined, with AviChina Industry & Technology up 7.1 per cent to HK$5, and CSSC Offshore & Marine Engg Group gaining 5.2 per cent to HK$13.68.

In the mainland, the Shanghai Composite Index dropped 0.3 per cent to end at 3,262.08.

For the week, however, the index still rose 0.3 per cent, the seventh straight week ahead and the longest stretch of increases in more than two years.

The CSI 300 fell 0.5 per cent to finish Friday at 3,707.58. The Shenzhen Composite and the ChiNext Price Index fell 0.6 per cent and 0.8 per cent respectively to 1,858.49 and 1,719.62.

Defence plays soared across the board amid escalating tensions between China and India over their ongoing disputed border.

China Aerospace Times Electronics, Aerospace Communications Holdings, and AVIC Helicopter all rose by their daily limits of 10 per cent.