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Nikkei Markets

Hong Kong shares rise on trade deal bets and China data

BeiGene set for record high after Amgen takes $2.7 billion stake

HONG KONG (Nikkei Markets) -- Hong Kong shares headed higher on Friday, spurred by hopes for a Sino-American trade deal and gains for Chinese equities listed in the city after better-than-expected mainland factory activity data.

The Hang Seng Index was up 0.4% to 27,020.20 by noon. Heavyweight insurers AIA Group and Ping An Insurance Group rose 0.7% and 1.1%, respectively, contributing to about a third of the index's gains by points.

Lingering hopes of a preliminary Sino-American trade deal helped sentiment, as indications that the two nations will sign a partial agreement this month remain strong. U.S. President Donald Trump on Thursday said on Twitter that Washington and Beijing were working to find a new site to sign phase one of a trade deal. The Asia-Pacific Economic Cooperation forum in Chile, where the two sides were earlier expected to sign the pact, was canceled.

"The overall situation on U.S.-China trade is not too bad," said Hoyin Yiu, managing director for asset management at CASH Financial Services Group. "People have already factored in all the negative factors that surfaced."

The Hang Seng China Enterprises Index of large mainland companies listed in Hong Kong rose 0.5%. In the mainland, the Shanghai Composite Index was 0.7% higher by midday after a private survey showed manufacturing activity in Asia's largest economy expanded more than expected. The Caixin/Markit manufacturing Purchasing Managers' Index came in at 51.7 for October, higher than the 51 reading analysts polled by Reuters were anticipating.

Meanwhile, data released on Thursday showed Hong Kong slid into a recession in the third quarter. The city's gross domestic product shrank 3.2% in the July-to-September period from the preceding three months, contracting for a second consecutive quarter.

Biotechnology company BeiGene jumped 29.5% to HK$108, heading for a record high, after U.S.-listed drug company Amgen said it will buy a 20.5% stake in BeiGene for $2.7 billion.

Beauty services provider Perfect Shape Medical jumped 19.7% after saying it expects operating profit for the six months ended Sept. 30 to have "substantially" increased from a year ago.

China National Building Material added 3.6% following a 36% year-over-year increase in January-to-September net profit and a 16.8% rise in revenue.

WuXi Biologics Cayman slid 6.2% to HK$86.75 after the company announced a placement of 46.5 million new shares at HK$85 apiece. The company said its controlling shareholder Biologics Holdings also agreed to sell 46.5 million existing shares at the same price.

-- Benny Kung

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