Hong Kong shares rally for sixth consecutive session before MSCI reveals eagerly awaited A-share list

Hong Kong’s stock market rose for a sixth straight session on Monday as brokers and financials outperformed ahead of index compiler MSCI’s announcement of the list of A shares that will be added to its global benchmarks.

The Hang Seng Index rose 1.35 per cent, or 419.02 points, to 31,541.08. The Hang Seng China Enterprises Index, which tracks Hong Kong-listed Chinese companies, gained 1.61 per cent, or 199.25 points, to 12,544.55.

Hong Kong’s first-quarter gross domestic product growth, which rose to 4.7 per cent from a year earlier – the fastest pace since the second quarter in 2011 – and above estimates of 3.4 per cent, also acted as a catalyst.

MSCI will announce the list of A-share companies at 5am on Tuesday that will be added to its global benchmarks, effective June 1. Analysts expect the inclusion will further stimulate northbound investment through the stock connect.

Shares in Citic Securities surged 5.90 per cent to HK$20.10. China Galaxy Securities advanced 3.38 per cent to HK$5.20. Haitong Securities gained 2.08 per cent to HK$10.80.

AIA Group rose 2.13 per cent to HK$74.35, China Construction Bank climbed 1.83 per cent to HK$8.35 and HSBC added 1.10 per cent to HK$78.40. The three shares together contributed 140 points to the benchmark index.

Smartphone lens manufacturer Sunny Optical Technology (Group) surged 7.87 per cent to HK$153.50 after reports that Apple was set to debut several new iPhone models in September.

US President Donald Trump also said in a tweet over the weekend that he was working with Chinese President Xi Jinping to help ZTE resume operations.

However, Apple supplier AAC Technologies Holdings slumped 4.85 per cent to HK$115.10, the worst performing blue chip, after its first-quarter net profit increase of 6 per cent missed estimates.

Tencent Holdings added 0.73 per cent to HK$411.80 ahead of its first-quarter earnings release on Wednesday.

“Traditional sectors rebounded sharply given that the economy is doing quite well,” said Stanley Chan, director of research at Emperor Securities. “But the Hang Seng Index may find a cap at 32,000 for now because people want to see what the situation is with Tencent’s results.”

Sino Biopharmaceutical climbed 3.90 per cent to a record high of HK$19.16 after Bank of America Merrill Lynch raised its target price to HK$24. CSPC Pharmaceutical Group jumped 4.27 per cent to HK$22.

In mainland trading, the Shanghai Composite Index was up 0.34 per cent to 3,174.03. The large-cap CSI 300 climbed 0.94 per cent to 3,909.29.

The Shenzhen Composite Index however edged down 0.10 per cent to 1,823.25, while the Nasdaq-style ChiNext slipped 0.21 per cent to 1,830.98.

The latest government statistics showed new loans extended in China reached 1.18 trillion yuan (US$186 billion) in April, exceeding the consensus estimate of 1.1 trillion yuan. Total social fundraising, a gauge of credit and liquidity, also proved stronger than expected at 1.56 trillion yuan, according to the People’s Bank of China.

Apple-related shares also attracted fund inflows. Lingyi iTech Guangdong, a supplier to the iPhone maker that makes magnetic materials, jumped 7.73 per cent to 7.25 yuan. Shenzhen FRD Science and Technology, which manufactures graphite flakes and other electronic materials for smartphone makers, climbed 3.43 per cent to 63.87 yuan.

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