Hong Kong stocks end higher amid upbeat company earnings, led by casino groups; Cathay Pacific drifts lower after first half loss

PUBLISHED : Wednesday, 08 August, 2018, 6:26pm
UPDATED : Wednesday, 08 August, 2018, 6:47pm

Hong Kong’s stock market rose for a third day on Wednesday after a slew of robust corporate earnings announcements and the rebound in the Chinese currency. Mainland Chinese markets fell however as worries over the US-Sino trade war lingered.

The Hang Seng Index rose 0.4 per cent or 110.26 points at 28,359.14 and the Hang Seng China Enterprises Index was also higher by 0.3 per cent or 35.08 points to 10,901.18.

“The market’s focus turned to the good corporate earnings results today. China may also launch more supportive policy measures,” said Ben Kwong Man-bun, a director of KGI Asia. “But today’s gains were capped because investors are still cautious about the trade war.”

Hong Kong Exchanges and Clearing gained 1 per cent to HK$229 after reporting a record net profit for the first six months of 2018 of HK$5.04 billion (US$642.1 million), up 44 per cent from a year earlier. The buoyant result was boosted by higher market turnover and new listings after the bourse operator recently carried out its largest listing reform in 25 years with the aim of becoming a hub for technology companies.

Galaxy Entertainment Group jumped 4.5 per cent to HK$59.75, becoming the best performing blue chip. The Macau casino group announced strong second quarter results in which earnings before interest, taxes, and amortisation grew 32 per cent to HK$4.326 billion, beating estimates and market forecast, mainly owing to robust market share gains in both the high roller and mass market segments.

Sands China rose in tandem, up 1.3 per cent to HK$38.80.

Cathay Pacific Airways slipped 1.8 per cent to HK$11.86 after reporting a loss of HK$263 million for the first half , compared to estimates by four analysts by the Post that ranged between a HK$1.8 billion loss to a HK$154 million profit.

Cathay Pacific reports loss of US$33 million on the back of rising fuel costs

Tencent Holdings rose 2 per cent to HK$364 , contributing 61 points to the benchmark index, ahead of the release of its interim results next Wednesday. The internet giant announced late on Tuesday that it has received approval from Hong Kong’s stock exchange to spin-off its China online music platform, Tencent Music Entertainment Group, for a listing in the US.

Oil stocks rose for a third day, buoyed by falling US crude inventories and the introduction of sanctions against Iran. PetroChina advanced 3.2 per cent to HK$6.07, CNOOC gained 1.6 per cent to HK$13.08 and Sinopec Corp added 0.8 per cent to HK$7.6

China Tower closed flat at HK$1.26 in debut trade. As many as HK$5.5 billion worth of shares changed hands, making China Tower the second-most heavily traded issue on the Hong Kong exchange.

However Chinese developers pared Tuesday’s rebound. China Evergrande Holdings retreated 1.2 per cent to HK$24.90 after a 21 per cent surge while Sunac China Holdings dropped 2.7 per cent to HK$23.05 after climbing 8 per cent on Tuesday. Agile Group Holdings dropped 4.9 per cent to HK$11.36 yuan.

Mainland stocks fell on Wednesday, with the Shanghai Composite Index dropping 1.3 per cent or 35.30 points to 2,744.07 and the CSI 300 – which tracks large companies listed in Shanghai and Shenzhen – was down 1.6 per cent or 54.36 points to 3,314.51.

The Shenzhen Composite Index eased 1.9 per cent or 28.35 points to 1,466.70 and the Nasdaq style ChiNext lost 2.1 per cent or 31.68 points to 1,447.76.

Shandong Lukang Pharmaceutical, Anzheng Fashion Group and Anhui Sun Create Electronics fell by their daily limit of 10 per cent.

The US will begin collecting 25 per cent tariffs on another US$16 billion worth of Chinese goods on August 23, the US Trade Representative’s office said on Tuesday as it published a final tariff list targeting 279 imported product lines.

The latest list brings the total Chinese imports that face a 25 per cent tariff to about US$50 billion.

Trump has also threatened 25 per cent tariffs on another US$200 billion worth of Chinese goods, and possibly another US$300 billion worth.

Onshore yuan rose by as much as 0.45 per cent to 6.8008 per dollar on Wednesday, before trading lower to 6.8384, stabilising after an almost 7 per cent decline since mid-June.