China data, casino rally propel Hong Kong stocks to fresh one-year high

Shanghai Composite hits three-week high after China reports unexpected jump in imports for August, while exports fall less than expected

PUBLISHED : Thursday, 08 September, 2016, 9:26am
UPDATED : Thursday, 08 September, 2016, 10:25pm

Hong Kong stocks returned to their winning ways on Thursday to close at their highest level in more than a year, propelled by robust Chinese trade data for August and a late-afternoon rally in casino shares.

Mainland Chinese stocks also finished at their highest level in nearly three weeks.

Hong Kong’s benchmark Hang Seng Index rebounded after slight losses the previous day, up 0.8 per cent or 177.53 points to close at 23,919.34, the highest level since August last year. The benchmark has risen for five of the past six sessions.

The Hang Seng China Enterprises Index, or the H-shares index, gained 0.4 per cent or 38.02 points to 10,008.21.

Turnover stood at HK$78 billion, slightly lower than Wednesday’s HK$80 billion.

Investors reacted positively to China’s trade data for August, which beat market expectations.

Earlier in the day, the Bureau of Statistics reported that China’s exports in US dollar terms fell a better-than-expected 2.9 per cent in August, decelerating from a 4.4 per cent decline in July. Meantime, imports unexpectedly rose 1.5 per cent year on year, compared with a 12.5 per cent slide in July.

“August import strength is mainly driven by two major factors – a nice rebound in commodity imports and a significant rise in processing imports, which likely reflects the potential near-term boost to the tech production cycle on the back of new smartphone product launches,” JP Morgan analysts Grace Ng, Haibin Zhu and Marvin M Chen wrote in a note on Thursday.

We expect macro policy to remain growth-supportive in the rest of the year
JP Morgan analysts

“We expect macro policy to remain growth-supportive in the rest of the year,” they added, noting that “infrastructure investment” will continue to be a key support for near term growth.

Leading the way on Hong Kong markets were Macau gaming stocks, which posted significant gains in the final hour of trading after Macau’s chief executive Fernando Chui Sai On released the city’s first five-year development plan and said the its gaming industry has stabilised.

Chui expected the sector to maintain stable growth, with estimated annual revenues of 200 billion Macau pacatas.

Galaxy Entertainment and Sands China were the top two gainers among blue-chips. Galaxy surged 5.9 per cent to HK$28.95 and Sands China jumped 4.4 per cent to HK$34.5. Rival Wynn Macau climbed 4.5 per cent to HK$12.54, MGM China gained 3.2 per cent to HK$12.88 and SJM Holdings rose 2.9 per cent to HK$5.4.

Apple-related shares also advanced broadly, after the US tech giant launched the iPhone 7 and other upgraded products at its annual event in San Francisco earlier in the day. Hong Kong telecom operator Hutchison Telecommunications Hong Kong ended up 2.2 per cent to HK$2.79. AAC Technologies, an acoustic component supplier to Apple, improved by 3.3 per cent to HK$90.2.

Separately, mainland Chinese real estate developer Longfor Properties tumbled 5.6 per cent to HK$12.18, after Cai Kui, the ex-husband of chairwoman Wu Yajun, reduced his stake in the company and sold 150 million shares for HK$1.8 billion.

On the mainland, the Shanghai Composite Index eked out small gains and rose for a fifth straight session, up 0.1 per cent or 4.02 points to 3,095.95, the highest in nearly three weeks. However, the large-cap CSI300 edged lower by 0.04 per cent or 1.26 points to 3,339.56.

The Shenzhen Component Index inched up 0.1 per cent or 12.47 points to 10,851.19 while the Shenzhen Composite Index rose 0.3 per cent or 5.53 points to 2,050.08. The ChiNext Index finished 0.5 per cent or 11.41 points higher at 2,223.47.

Combined turnover for Shanghai and Shenzhen markets dropped to 449 billion yuan from Wednesday’s 561 billion yuan.