HONG KONG’S benchmark Hang Seng Index rose 2.8% this week, finishing up 1.2% today, to end the five-day trading period at 23,801.9 on a series of upbeat earnings announcements.
This allowed Hong Kong-listed shares to outperform the quake-ravaged Nikkei in Japan in the first quarter, but fall short of the Shanghai Composite over the first three months, the benchmark index for PRC-listed A and B shares.
In the first trading day of the second quarter, the Hang Seng Index – which recently began daily trading at 9:30 am to bring the bourse in line with its mainland counterpart – tracked strong performance of A and B shares across the de facto border in early trade, with daily turnover reaching 91.51 bln hkd.
Today’s mini-rally follows Thursday’s 0.32% gain on renewed optimism in global growth, after the world’s biggest economy – the US – announced over 201,000 new jobs in March, the third consecutive month when payrolls have expanded by over 200,000.
The Industrial sub-index was the big winner on Friday, finishing up 1.69% on a deluge of upbeat earnings statements issued during this, the “high season” for annual reports.
The Finance sub-index also was one of the standout performers today, adding 0.92% while the Property sub-index was up 0.99% by market close at 4:00 pm local time.
PRC financial media said oil and petrochemical firms rose in unison on a renewed interest in energy, especially short-term proxy alternatives to nuclear power plays which are being pummeled by the still unresolved meltdown scenario in northern Japan.
CNOOC Ltd (HK: 883), which announced on Wednesday that it inked a 1.5 bln usd deal with UK-based Tullow Oil for a 33% stake in Ugandan sites, rose 4.59% to 20.5 hkd.
It is CNOOC’s second major exploration and production project in Africa following earlier deals in oil rich Nigeria.
Peer PRC petrochemical play Petrochina Co Ltd (HK: 857), the country's top oil producer and the world’s most valuable firm by market value (mkt cap: 307.5 bln usd), added 2.04% to finish Friday at 12.02 hkd.
Other blue chip energy and resource stocks led the end-week rally on Friday.
Aluminum Corporation of China (HK: 2600, CHALCO), the country’s top aluminum producer and the world's No.2 alumina miner, rose 1.35% to 7.5 hkd while China Coal Energy Co Ltd (HK: 1898) added 1.13% to 10.72.
Better news from the US -- including a two-year low 8.8% jobless rate -- along with generally bullish earnings reports by blue chips listed in Hong Kong, helped lift the large-caps today.
Ping An Insurance (Group) Co Of China Ltd (HK: 2318), whose total shares are nearly 17% held by HSBC, shot up 4.76% Friday to close at 82.6 hkd, while major property developers China Overseas Land & Investment Ltd (HK: 688) finished up 3.67% at 16.4 and China Resources Land Ltd (HK: 1109) rose 2.33% to 14.9.
Banks had a good day on expectations of strong upcoming earnings statement releases.
China Construction Bank Corp (HK: 939) finished up 1.78% at 7.42 hkd, Industrial and Commercial Bank of China Ltd (HK: 1398, ICBC) rose 1.55% to 6.56 and Bank of China Ltd (HK: 3988) was 0.92% higher at 4.37.
Looking ahead
One analyst said the Hang Seng should hover around the 23,600 level over the near term.
“Throughout April, the ongoing sovereign crises in the EU and the unresolved disaster in Japan will continue to provide a drag on sentiment. If the EU or the PRC raises interest rates again, this will serve as another downside driver, but there should be solid support around the 23,000 level."
Another market watcher said barring a worsening situation in the US economy, the Eurozone’s debt situation or a sudden turn for the worse in Japan’s nuclear worries, the Hong Kong market may see a sustained albeit gradual climb over the near-term, especially if blue chip full-year earnings continue to surprise on the upside.
See recent: CHINA SHARES Add 0.21% To 2,984.01 On Strong Resources
