March 20, 2017 7:32 pm JST

Earnings optimism sends Hong Kong stocks to fresh 19-month highs

HONG KONG (NewsRise) -- Hong Kong stocks climbed to the highest level since August 2015 as Chinese investors pumped in more funds into the local market on optimism over earnings and dividend payouts. Tencent Holdings hit a record high and China Shenhua Energy jumped the most in eight years to pace the rally.

The Hang Seng Index added 0.8% to 24,501.99, among the day's best-performing equity benchmarks in Asia. Driving the gauge's point gains, heavyweight stock Tencent climbed 2.8% to HK$228.20 before its annual results due Wednesday, while Shenhua surged 16% as the nation's largest coal producer announced a special dividend of 2.51 yuan ($0.36) a share after a 41% increase in its 2016 net income. China Mobile, also due to report annual earnings this week, surged 3.7% after saying it added 6.4 million new 4G subscribers last month.

The enthusiasm overshadowed losses by Chinese real estate shares amid concerns the nation's policy makers could be readying a fresh set of curbs to cool housing prices. Government data released over the weekend indicated property prices continued to rise last month, a sign that tightening measures announced late last year were likely becoming less effective.

China Overseas Land & Investment slid 1.6% and China Vanke gave up 3.9%, while China Resources Land, the Hang Seng Index's best performer last week, lost 2.4%.

"There is some negative effect on property stocks, but I don't think there'll be too much impact on the market," said Kenny Tang, chief executive officer at Jun Yang Securities.

Turnover on the stock exchange's main board reached almost 98 billion Hong Kong dollars ($12.6 billion), higher than the daily average in recent weeks. Mainland investors traded about HK$12 billion of stocks through the links connecting Hong Kong with Shanghai and Shenzhen.

Meitu, the developer of a selfie app for smartphones, slumped more than 11% to HK$15.98 at the day's close after surging as high as HK$23.05 earlier Monday. The afternoon slump came amid concern the shares had risen too much too fast after mainland investors gained access to the stock over the Shenzhen-Hong Kong link this month. The shares, still up 59% in March, were among the day's most traded with a turnover of nearly HK$3.8 billion, exchange data show.

The Shanghai Composite Index advanced 0.4% and the Shenzhen equity benchmark gained 0.3%. The yuan slipped 0.1% to 6.9040 against the dollar in offshore trading. The Nikkei Asia300 Index rose 0.3% to 1,171.35.

China Coal Energy jumped 4% as Shenhua's declaration of a special dividend helped lift coal producers. The company on Friday said its President Gao Jianjun has resigned, and that his duties will be performed by vice president Qi Hegang until a new president is appointed. China Coal also reported a nearly 14% increase in February sales of the fuel.

Bank of East Asia rose 0.2% after announcing the acquisition of a 21% stake in Cambodia's Prasac Microfinance Institution for about $78 million.

Belle International Holdings slid 3.3% after warning its net income for the year ended Feb. 28 could drop by 15% to 25%.

Shanghai Electric Group added 1% in the upbeat market. The company reported a 3.6% drop in 2016 net income after the close of trading on Friday and said it won't pay a dividend.

ZTE, also due to report earnings this week, advanced 4.8%, extending its advance this month to 18%. The stock has rallied after pleading guilty to charges by U.S. authorities that it had violated sanctions on Iran and North Korea.

Citic Telecom International Holdings, a unit of Citic, climbed 3.2% after reporting a 6% increase in 2016 earnings on Monday.

-- V. Phani Kumar

Asia300

Tencent Holdings Ltd.

China

Market(Ticker): HKG(700)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 275,754.96M
Shares: 9,477.24M
Asia300

China Shenhua Energy Co. Ltd.

China

Market(Ticker): HKG(1088)
Sector:
Industry:
Energy Minerals
Coal
Market cap(USD): 53,805.89M
Shares: 19,889.61M
Asia300

China Mobile Ltd.

Hong Kong

Market(Ticker): HKG(941)
Sector:
Industry:
Communications
Wireless Telecommunications
Market cap(USD): 228,816.10M
Shares: 20,475.48M
Asia300

China Overseas Land & Investment Ltd.

Hong Kong

Market(Ticker): HKG(688)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 31,949.27M
Shares: 10,956.20M
Asia300

China Vanke Co., Ltd.

China

Market(Ticker): HKG(2202)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 33,829.52M
Shares: 11,039.15M
Asia300

Bank of East Asia Ltd.

Hong Kong

Market(Ticker): HKG(23)
Sector:
Industry:
Finance
Regional Banks
Market cap(USD): 11,258.17M
Shares: 2,703.09M
Asia300

Belle International Holdings Ltd.

Hong Kong

Market(Ticker): HKG(1880)
Sector:
Industry:
Consumer Non-Durables
Apparel/Footwear
Market cap(USD): 5,527.08M
Shares: 8,434.23M
Asia300

Shanghai Electric Group Co., Ltd.

China

Market(Ticker): HKG(2727)
Sector:
Industry:
Producer Manufacturing
Electrical Products
Market cap(USD): 13,555.89M
Shares: 12,824.30M
Asia300

ZTE Corp.

China

Market(Ticker): HKG(763)
Sector:
Industry:
Electronic Technology
Telecommunications Equipment
Market cap(USD): 10,185.32M
Shares: 4,184.62M
Asia300

CITIC Ltd.

Hong Kong

Market(Ticker): HKG(267)
Sector:
Industry:
Distribution Services
Wholesale Distributors
Market cap(USD): 41,572.23M
Shares: 29,090.26M

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