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Nikkei Markets

Hong Kong shares rise for fourth day after Yi Gang's speech

Central bank says China to raise foreign ownership limits in insurance

HONG KONG (Nikkei Markets) -- Hong Kong shares ended Wednesday in the longest winning streak in almost a month, boosted by easing fears over U.S.-China trade tensions and Chinese policies intended to allow more foreign participation in the domestic financial sector.

The Hang Seng Index gained 0.6% to 30,897.71, its fourth straight day of gains. People's Bank of China Governor Yi Gang said the country would raise the foreign ownership limit in sectors such as insurance to 51% within a few months, with full ownership possible in three years. The nation will also relax other restrictions, allowing foreign financial companies to offer the services as their local counterparts.

Yi's remarks, made at the annual Boao Forum for Asia in China's Hainan province, helped further improve risk sentiment after President Xi Jinping on Tuesday indicated Beijing's plans to cut import tariffs and widen market access for foreign investors.

"These positive moves underline China's commitment to financial reform, promoting [the] international use of renminbi and liberalizing its capital account," Peter Wong, deputy chairman at The Hongkong and Shanghai Banking Corp. wrote in a report.

Insurance major AIA Group climbed 4.7%, the biggest driver of the Hang Seng Index's gains for the day by points, while China Life Insurance and Ping An Insurance Group underperformed, rising 0.2% each.

PetroChina gained 3.8% and CNOOC jumped 4.2% after U.S. crude prices jumped overnight. Sunny Optical Technology Group fell 3.4%, trimming gains this week to 6.9%. The Apple supplier on Tuesday reported a 50.6% year-on-year increase in the sales of handset lenses in March.

China's securities regulator on Wednesday said daily quotas for the stock connects linking mainland and Hong Kong markets will be expanded, with northbound quotas being boosted to 52 billion yuan ($8.26 billion) and daily southbound quotas raised to 42 billion yuan. The quotas represent the daily limits for the maximum net-buy value of cross-border trades through the links. The changes will be effective May 1, the China Securities Regulatory Commission said on its website.

In China, the Shanghai Composite Index added 0.6%, while its Shenzhen counterpart climbed 0.5%. The onshore-traded yuan slipped 0.1% against the U.S. dollar to 6.2840.

Steven Leung, executive director at UOB Kay Hian (Hong Kong), said he did not expect the new policy to have a substantial impact on the market. "I do not see a huge demand for both southbound and northbound fund flow to use up the daily quota under the current investment environment," he said.

Market operator Hong Kong Exchanges & Clearing added 1.5% and was among the three most actively traded stocks in Hong Kong.

China State Construction International Holdings rose 3.2% after reporting a 25.6% increase in January-March new contract value.

Health and Happiness International Holdings tumbled 7.4% to HK$58 apiece after the infant formula maker said a minority shareholder disposed of 18 million shares through a placement at HK$57.50 apiece.

Greenland Hong Kong Holdings fell 5.7% after reporting a 19% drop in first-quarter contracted sales at 5.7 billion yuan.

China Merchants Land slipped 2.4% following an 11% drop in January-March aggregate contracted sales to 5.37 billion yuan.

ANTA Sports Products jumped 10.5% after saying on Tuesday that it expected retail sales of ANTA branded products to have increased 20% to 25% in the first quarter.

Jewelry trader WE Solutions, formerly O Luxe Holdings, fell 3.3% after saying it expected to record a consolidated net loss of between 155 million Hong Kong dollars ($19.7 million) and HK$170 million for the six months ended March 31, compared with a net profit of about HK$33 million a year earlier.

United Company Rusal dropped 1.9%. The company said it was evaluating a notice from the London Metal Exchange which said it would introduce a "temporary conditional suspension on placing Rusal metal" under warrant in warehouses unless the owner could demonstrate that it will not be in breach of U.S. sanctions.

The move is effective April 17. The stock has shed 56% so far this week after its owner Oleg Deripaska was named among Russian businessmen that the U.S. had imposed sanctions on.

Sinopharm Group plunged 16.9% after the pharmaceutical product distributor said it expects first-quarter profit to fall about 30% from a year earlier.

-- Benny Kung

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