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Nikkei Markets

Hong Kong shares end week higher on trade deal hopes, earnings

Ping An and China Unicom rise on week after results

HONG KONG (Nikkei Markets) -- Hong Kong shares capped a weekly gain on Friday, helped by optimism over progress in Sino-American trade talks and upbeat earnings from some heavyweights.

The Hang Seng Index added 0.6% to 29,012.26 on Friday, taking the weekly advance to 2.8%. Ping An Insurance Group and China Unicom (Hong Kong) were among the best performers for the week, rising 6.6% and 8.6%, respectively, after reporting higher 2018 earnings. Ping An ended 1.1% higher on Friday, while China Unicom slipped 0.1%.

Pork producer WH Group, which has significant interests in the U.S., added 4.6% on Friday ahead of its results, due after markets close. The stock ended the week 9.7% higher, leading percentage gains on the Hang Seng Index.

Galaxy Entertainment Group and Sands China advanced 2.6% and 3.1% on Friday amid a rally by casino stocks after the Macau government extended licenses for SJM Holdings and MGM China Holdings, which were due to expire in March 2020, until June 2022. SJM added 1.6% and MGM China rose 3.5% on Friday.

The Shanghai Composite Index added 1% on the mainland on Friday, while the Hang Seng China Enterprises Index climbed 0.5%. Chinese Vice Premier Liu He spoke with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer by telephone, and the two sides made further progress on trade talks, Chinese state media Xinhua reportedly said on Friday.

Some participants were circumspect about the developments.

"People have been saying there is progress, but nobody knows what the progress is," said Stanley Chik, head of research at Bright Smart Securities. "Earnings will have a bigger impact on the market in the short term."

Chik said as long as the A-share market continues rebounding, and company earnings remain positive, the Hong Kong stock market will remain supported.

"The most important thing for the A-share market is sentiment," he added.

Shares of coking and refined chemicals producer China Risun Group ended unchanged from their initial public offering price of HK$2.80 in their trading debut in Hong Kong. Meanwhile, Chinese property management company Binjiang Service Group, also debuting Friday, climbed to HK$7.35 from its IPO at HK$6.96.

Hong Kong's Securities and Futures Commission on Thursday said it had reprimanded and fined Merrill Lynch Far East, Morgan Stanley Asia and Standard Chartered Securities for failures in their roles as sponsors for initial public offerings in the city. The regulator also fined UBS HK$375 million for failing in its role as sponsor and partially suspended UBS Securities Hong Kong's license to advise on corporate finance for one year, preventing it from acting as a sponsor during the period.

Air China edged 0.7% higher after reporting a 6.9% increase in passengers carried during February.

Television maker Skyworth Digital Holdings climbed 3.5% after saying it expected net profit for the nine months ended Dec. 31 to have at least doubled from a year ago.

Sinopec Oilfield Service, an affiliate of China Petroleum & Chemical, added 3.5% after saying its unit secured a contract worth $340 million from Saudi Aramco to service four drilling rigs.

China Resources Land added 2.8% after reporting an 18.5% increase in gross contracted sales for February.

Colour Life Services Group jumped 7.5%. The property management services company on Thursday said it expected 2018 profit to have increased more than 50% from a year earlier.

Financial services company Differ Group Holding climbed 3.2% after saying it expected 2018 net profit to have risen at least 50% from a year ago.

Chicken products maker Leyou Technologies Holdings ended 1.7% higher following a forecast of 2018 profit growth of at least 50% from a year earlier.

-- Benny Kung

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