Hong Kong stocks bounce back as Ping An, Geely Auto surge

Hang Seng Index is virtually flat on the week, edging up 0.04 per cent

PUBLISHED : Friday, 20 October, 2017, 9:27am
UPDATED : Friday, 20 October, 2017, 10:35pm

Hong Kong stocks bounced back strongly on Friday to end the week slightly higher as Geely Auto, China Mengniu Dairy and Ping An Insurance surged.

The Hang Seng Index advanced 1.17 per cent, or 328.15 points, to 28,487.24 after a slide yesterday caused partly by China’s latest economic data raising concerns about slowing growth in the fourth quarter. The gauge edged up by 0.04 per cent on the week.

The Hang Seng China Enterprises Index, known as the H-share index, rose 1.77 per cent, or 200.90, points to 11,558.35.

Chinese cement stocks spiked as prices of the raw construction material in the east of China were reportedly revised up again. Sinoma soared 11.11 per cent to HK$5.50 and CNBM shot up 10.96 per cent to HK$6.68.

Geely Auto was the biggest winner among blue chips, rallying 5.84 per cent to HK$26.30.

Financials led gains, with Ping An climbing 3.79 per cent to a record closing high of HK$67.15. China Construction Bank gained 2.21 per cent to HK$6.93 ahead of the release of its third quarter results next week. Industrial & Commercial Bank of China added 2.77 per cent to HK$6.30.

China Mengniu Dairy rose 3.60 per cent to HK$21.60, snapping three straight sessions of losses.

Chinese property developer Sunac China surged 5.06 per cent to HK$39.45, recovering from a 2 per cent drop on Thursday. Data showed the stock was the most actively traded by mainland Chinese investors who can directly access a select group of stocks in Hong Kong via the Shanghai-Hong Kong Stock Connect scheme. Sunac’s shares have risen sixfold so far this year.

AIA Group bucked gains in financials, tumbling 1.47 per cent to HK$60.2 despite its third-quarter results showing the value of new business – a gauge of future growth – rose 20 per cent year on year. The performance was bolstered by strong sales in China and Hong Kong. AIA is up 36 per cent this year.

On the mainland, the Shanghai Composite Index rose 0.25 per cent to 3,378.65, but the large-cap CSI300 eased 0.11 per cent to 3,926.85.

The Shenzhen Composite Index and the start-up ChiNext board added 0.81 per cent and 0.95 per cent respectively, settling at 1,999.68 and 1,880.21.

The main economic theme of the Communist Party congress has been that the leadership is doubling down on its focus on the “quality” of growth rather than the “quantity”, Christy Tan, head of markets strategy at National Australia Bank wrote in a research note.

Meanwhile China Banking & Regulatory Commission chairman Guo Shuqing said at the congress that

foreign participation, in both banks and the broader financial sector, will be key to improving risk monitoring and liquidity management. However there are still doubts about whether the

fundamental character of the Chinese government could be an impediment to reforms that essentially entail the relinquishing of control.

“This is probably going to be the next source of serious policy tension in the next 2-3 years and is something that could determine how successful China turns out to be in opening up and

increasing its external influence,” Tan said.