Hong Kong shares gain on investors’ optimism over Trump Kim summit

Tech shares, led by Tencent Holdings, resume gains

PUBLISHED : Monday, 11 June, 2018, 5:44pm
UPDATED : Monday, 11 June, 2018, 5:48pm

Hong Kong stocks closed moderately higher on Monday ahead of a historic US-North Korea summit that investors hope might lead to peace on the Korean peninsula.

US President Donald Trump and North Korean leader Kim Jong-un will meet on Tuesday in Singapore, possibly laying the groundwork for ending a nuclear stand-off between the old foes and even getting the international community to lift economic sanctions against Pyongyang.

The Hang Seng Index rose 0.3 per cent, or 105.49 points, to 31,063.70 and the Hang Seng China Enterprises Index added 0.05 per cent, or 6.24 points, to 12,172.03.

“Everyone is watching and waiting for the outcome of the meeting between Trump and Kim,” said Alvin Cheung Chi-wai, associate director at Prudential Brokerage. “But the stock market is expected to go quiet this month because of the World Cup.”

The month-long soccer tournament in Russia, which starts on Thursday, is likely to distract brokers’ attention from trading.

Technology stocks resumed gains after losses on Friday. Tencent Holdings gained 1 per cent to HK$419, Pax Global Technology climbed 6 per cent to HK$4.27 while Alibaba Health Information Technology spiked 13.8 per cent to HK$8.24, its highest level since 2015.

Geely Automobile Holdings advanced 3 per cent to HK$24.30 – day’s best-performing blue chip amid bullish brokers’ forecasts. Lynk & Co, the car brand jointly owned by Geely and Volvo Cars, is likely to beat the 150,000 unit sales target for this financial year, according to Credit Suisse.

China’s car sales grew 3.5 per cent year on year in May, but Geely posted 50.1 per cent growth, outperforming rival BYD, Goldman Sachs said in a report. BYD eased 0.1 per cent to HK$54.05.

Hong Kong Aircraft Engineering surged 54.8 per cent to HK$68.10, the biggest daily rise on record, after parent Swire Pacific proposed to take private the unit in a buyout valued at US$382 million because of illiquid stock trading.

China Resources Cement Holdings climbed 5.5 per cent to HK10.32.

Gambling stocks also rose. SJM Holdings gained 3.9 per cent to HK$10.64. Wynn Macau climbed 2.4 per cent to HK$28.10 and Melco International Development was 2.2 per cent higher at HK$25.55. MGM China Holdings added 1 per cent to HK$21, snapping a six-day decline. Sands China rose 1.6 per cent to HK$45.45, marking the biggest daily increase in two weeks. Galaxy Entertainment advanced 1.7 per cent to HK$65.50.

Mainland stocks were soft however. China’s massive trade surplus with the world shrank in May, as imports surged 26 per cent from a year earlier – above economists expectations of 18 per cent, official data showed on Friday.

The Shanghai Composite Index slipped 0.6 per cent, or 14.36 points, to 3,052.78 while the CSI 300 – which tracks large caps listed in Shanghai and Shenzhen – was unchanged at 3,779.98.

The Shenzhen Composite Index lost 0.6 per cent, or 10.22 points, to 1,741.18 and the Nasdaq style ChiNext dropped 1.3 per cent, or 22.90 points, to 1,688.62.

Wholesalers and retailers were among the biggest losers. Shanghai Runda Medical Technology dropped 8.3 per cent to 14.30 yuan. DaShenLin Pharmaceutical Group lost 5 per cent to 64.98 yuan. Chongqing Department Store eased 4.6 per cent to 35.15 yuan and Wangfujiang Group was 4.6 per cent lower at 22.51 yuan.