By Nimesh Vora and V. Phani Kumar
HONG KONG (Jun 23) -- Hong Kong stocks eked out a sixth weekly advance in seven weeks on the back of gains for Tencent Holdings and Hengan International Group, although they couldn't keep up with domestic Chinese equities after MSCI said it will add A-shares to its global benchmarks.
The Hang Seng Index ended little changed at 25,670.05 on Friday, carving out a 0.2% weekly increase. Paper-products maker Hengan, among the gauge's worst performers over the past year, jumped 8.8% this week after plumbing multi-year lows earlier this month. Heavyweight Tencent and Geely Automobile Holdings climbed at least 2.8% over the five-day period amid earnings-related optimism. On Friday, Hengan slid 1.1% and Tencent gave up 0.5% while the broader market struggled for direction. Geely added 0.7% after its parent Zhejiang Geely Holding Group agreed on Friday to purchase a 49.9% stake in Malaysia's Proton Holdings and 51% in the U.K.'s Lotus, both owned by Malaysian automotive group DRB-Hicom, for a total of $235 million.
The Hang Seng Index hasn't seen a positive close since MSCI announced before the markets opened on Wednesday that it'll add 222 yuan-denominated shares to its benchmarks. In contrast, the CSI 300 Index of large mainland companies in Shanghai and Shenzhen has risen each day since then. The Chinese gauge gained 0.5% Friday, capping its best week in seven months.
The relatively cool response in Hong Kong to MSCI's decision led some to question whether the local market was on solid footing.
"The MSCI good news is behind us and the market has hardly moved anywhere. To me, that is a sign that the market is losing a bit of steam," said Linus Yip, chief strategist at First Shanghai Securities.
PetroChina fell 2.4% during the week to pace energy shares lower after U.S. crude prices entered a bear market. The company's shares added 0.2% Friday.
The gains on mainland bourses stand out also as they came amid increased regulatory scrutiny of overseas acquisitions by some conglomerates, which led to a selloff in small-cap stocks in Shenzhen Thursday.
Fosun International gained 1.4% and HNA Holding Group climbed 3.2% on Friday, after each dropped at least 5.8% the previous day.
Likewise, Wanda Film Holding advanced 3.6% following a nearly 10% loss the previous day. The company's parent Wanda Group, controlled by China's richest man Wang Jianlin, on Thursday dismissed speculation that some Chinese lenders had been asked to dump the group's bonds as "just rumors."
Shimao Property Holdings climbed 0.6% Friday. The company said it will issue $450 million of senior notes maturing in 2022 and use some of the proceeds to refinance existing debt.
Zhuguang Holdings Group gained 1%, after saying it expects an accounting gain of about HK$380 million ($49 million) from the sale of certain property assets.
Q Technology Group advanced 4.8% after saying it expects group profits for the six months ending June 30 to more than double from a year ago.
China Environmental Energy Investment jumped 8.1% after forecasting a profit for the year ended March 31 as compared to a loss in the prior fiscal year.
- By Nimesh Vora and V. Phani Kumar; email@example.com; +852 3960 5102
- Edited By Suzannah Benjamin
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