September 12, 2017 7:49 pm JST

BYD, Geely rally to lead Chinese companies in Hong Kong

Hang Seng Index ends flat as developers retreat after three-day winning streak

HONG KONG (Nikkei Markets) -- Shares of Chinese companies trading in Hong Kong climbed on Tuesday as investors snapped up automakers with an interest in electric cars amid speculation the government favored environmentally friendly vehicles.

Electric car maker BYD soared 10.5%, its biggest gain in more than two years, to help push the Hang Seng China Enterprises Index of large mainland companies in the city 0.2% higher to 11,242.06. Geely Automobile Holdings jumped 6.1% and was the top gainer on the benchmark Hang Seng Index, which ended little changed, closing up about 17 points to close at 27,972.24. Geely is an affiliate of Volvo Car Group, which plans to replace all traditional fuel-driven vehicles with electric or hybrid cars by 2019.

The two companies were under the spotlight after China's state media reported recently that the country plans to eventually end the sale of gasoline and diesel cars, as part of efforts to cut emissions and reduce pollution.

"The market is using this as an excuse to buy" stocks associated with environmentally friendly vehicles, said Linus Yip, chief strategist at First Shanghai Securities. Still, "the timetable is not decided yet" for phasing out vehicles running on gasoline and diesel, and it could take a "long time" for a firm date to be set, he added.

BAIC Motor, which plans to produce electric vehicles in China with Germany's Daimler, rose 0.8%.

Dongfeng Motor Group slipped 0.4%, trimming its year-to-date gains to 33%. The carmaker on Monday reported a 15.8% increase in total sales for August. Data released by the China Association of Automobile Manufacturers on Monday showed the nation's total vehicle sales climbed to 2.19 million in August, 5.3% higher than a year earlier.

China Yongda Automobiles Services Holdings rose 6% after saying its unit Shanghai Yongda agreed to buy four dealerships in China.

Heavyweight stock Tencent Holdings added 0.7% to reach a record high. Tencent Music has signed a rights deal with Alibaba Group Holding, giving the e-commerce major the right to stream music from some of Tencent's exclusive deals with international music labels in exchange for reciprocal rights to Alibaba's catalogue of Chinese and Japanese classics, the Financial Times reported. Alibaba shares rose 3% in New York on Monday.

Tuesday's performance was marked by caution after the United Nations on Monday imposed tougher sanctions on North Korea, following its test of a hydrogen bomb earlier this month.

The Nikkei Asia300 Index of some of the region's most influential companies outside Japan gained 0.1%. In mainland China, the Shanghai Composite rose 0.1% and the CSI 300 Index of blue-chip stocks climbed 0.3%.

"Eliminating North Korea's risk factor will be a positive development for financial markets, but as we have yet to find out the response from Kim Jong Un's regime, we cannot assume negotiations are going to be successful," Hussein Sayed, chief market strategist at currency brokerage house ForexTime, wrote in a note.

Property developers retreated in Hong Kong on Tuesday, sending a gauge of large real-estate companies listed to its first decline in four days. Cheung Kong Property Holdings lost 1.2% and Hang Lung Properties fell 1.7%.

Q Technology Group jumped 9.1% a day after it tumbled 14%. The company on Tuesday revised its outlook for growth in camera module shipments to at least about 10% from about 25% earlier.

Fosun International fell 1.7%. A consortium led by the diversified conglomerate will take a 51% stake in a 44.9 billion yuan ($6.9 billion) public-private partnership project for high-speed railway in Zhejiang province, the Securities Times reported on Tuesday, according to Reuters.

New Focus Auto Tech Holdings soared 64%. Late Monday, the company said it is considering making certain changes to the composition of its board. It is also considering transactions that may be notifiable under the stock exchange's listing rules, if they materialize.

Xinhua News Media jumped 9.8% after saying it has terminated an agreement to acquire Mighty Capital Group. The termination will not have a materially adverse impact on existing operations and the group's financial position, it said.

Jiangxi Copper rose 2.1% after the Chinese company named Long Ziping as its new chairman, succeeding Li Baomin, who resigned after reaching retirement age.

-- Suzannah Benjamin and V. Phani Kumar

Asia300

BYD Co. Ltd.

China

Market(Ticker): HKG(1211)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 22,976.89M
Shares: 2,728.14M
Asia300

Dongfeng Motor Group Co., Ltd.

China

Market(Ticker): HKG(489)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 11,133.14M
Shares: 8,616.11M
Asia300

Tencent Holdings Ltd.

China

Market(Ticker): HKG(700)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 418,270M
Shares: 9,498.62M
Asia300

Alibaba Group Holding Ltd.

China

Market(Ticker): NYS(BABA)
Sector:
Industry:
Retail Trade
Internet Retail
Market cap(USD): 455,234.95M
Shares: 2,529.36M
Asia300

Cheung Kong Property Holdings Ltd.

Hong Kong

Market(Ticker): HKG(1113)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 31,740.62M
Shares: 3,697.49M
Asia300

Hang Lung Properties Ltd.

Hong Kong

Market(Ticker): HKG(101)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 10,656.24M
Shares: 4,497.57M
Asia300

Fosun International Ltd.

China

Market(Ticker): HKG(656)
Sector:
Industry:
Non-Energy Minerals
Steel
Market cap(USD): 18,248.68M
Shares: 8,572.22M

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