Hong Kong stocks notch gains amid low turnover, Shanghai shares also end in positive territory

Hang Seng Index rises 0.6 per cent; Shanghai Composite Index edges up 0.4 per cent

PUBLISHED : Thursday, 02 June, 2016, 9:27am
UPDATED : Thursday, 02 June, 2016, 6:07pm

Hong Kong and mainland Chinese stocks held steady in narrow trading on Thursday as most investors opted for the sidelines, awaiting further clarification on progress in the Stock Connect, and whether China shares will be added to a global index operated by compiler MSCI.

Analysts said investors are waiting to see whether the news of the Shenzhen Hong Kong Stock Connect plans – where investors on one exchange can also trade on the other – will materialise.

That’s also on top of whether the US Federal Reserve – the central bank to the world’s largest economy – will raise interest rates and also whether mainland Chinese shares will be included in the MSCI’s global emerging markets equity index.

The Hang Seng Index finished 0.5 per cent higher, adding 98.24 points to 20,859.22. The Hang Seng China Enterprises Index inched up 0.55 per cent, or 48.09 points, to 8,756.38.

The coal mining industry led the gains in the Hong Kong, jumping up 1.16 per cent.

Hong Kong Exchanges and Clearing shares climbed 1.35 per cent to HK$188.2 amid rumours that some brokerage houses have started testing their internal systems in preparation for the Stock Connect.

“There is some speculation that Beijing may announce the launch date for the link-up scheme before July 1,” Jun Yang Securities Chief Executive Kenny Tang Sing-hing said.

Most investors are still taking a wait-and-see attitude about whether the Shenzhen Hong Kong Stock Connect will be announced this month, Tang said.

Louis Tse Ming-kwong, director at VC Brokerage, said that the Hang Seng Index is likely to hover between 20,600 to 20,800 in the near term.

“Without sufficient turnover, we can’t reach higher ground. There’s no incentive to go in now,” said Tse.

Among the most actively traded shares, Lenovo dropped 4 per cent to HK$4.56 per share.

Google plans to sell 371 million Lenovo shares to raise US$218 million to US$221 million, according to a Reuters report, citing the International Financing Review.

The Chinese personal computer maker recorded a net loss of US$128 million for the last financial year ended March 31, reflecting its first loss in six years.

In other Hong Kong trading action, shares of Sands China rose 0.5 per cent after the company said in a filing late Wednesday that it had reached a settlement with former executive Steven Jacobs. Jacobs sued the casino in late 2010 after he was removed from his position following a falling out with Sands Corp Chairman Sheldon Adelson.

Bank of East Asia shares gained 1.23 per cent to HK$28.9 after the lender said it will close all 22 retail outlets of its subsidiary, East Asia Securities, as well as cut 180 employees.

In China, mainland stocks swung between minor gains and losses throughout the day. The Shanghai Composite Index edged up 0.4 per cent or 11.72 points to 2,925.23 while the CSI 300 — which tracks the large companies listed in Shanghai and Shenzhen — moved up 0.2 per cent or 6.55 points to 3,167.1.

The Shenzhen Composite Index stood at 1,904.74, up 0.97 per cent, or 18.23 points, while the Nasdaq style ChiNext added 0.91 per cent or 19.74 points to 2,188.56.