Earnings optimism sends Hong Kong stocks to fresh 19-month highs
HONG KONG (NewsRise) -- Hong Kong stocks climbed to the highest level since August 2015 as Chinese investors pumped in more funds into the local market on optimism over earnings and dividend payouts. Tencent Holdings hit a record high and China Shenhua Energy jumped the most in eight years to pace the rally.
The Hang Seng Index added 0.8% to 24,501.99, among the day's best-performing equity benchmarks in Asia. Driving the gauge's point gains, heavyweight stock Tencent climbed 2.8% to HK$228.20 before its annual results due Wednesday, while Shenhua surged 16% as the nation's largest coal producer announced a special dividend of 2.51 yuan ($0.36) a share after a 41% increase in its 2016 net income. China Mobile, also due to report annual earnings this week, surged 3.7% after saying it added 6.4 million new 4G subscribers last month.
The enthusiasm overshadowed losses by Chinese real estate shares amid concerns the nation's policy makers could be readying a fresh set of curbs to cool housing prices. Government data released over the weekend indicated property prices continued to rise last month, a sign that tightening measures announced late last year were likely becoming less effective.
"There is some negative effect on property stocks, but I don't think there'll be too much impact on the market," said Kenny Tang, chief executive officer at Jun Yang Securities.
Turnover on the stock exchange's main board reached almost 98 billion Hong Kong dollars ($12.6 billion), higher than the daily average in recent weeks. Mainland investors traded about HK$12 billion of stocks through the links connecting Hong Kong with Shanghai and Shenzhen.
Meitu, the developer of a selfie app for smartphones, slumped more than 11% to HK$15.98 at the day's close after surging as high as HK$23.05 earlier Monday. The afternoon slump came amid concern the shares had risen too much too fast after mainland investors gained access to the stock over the Shenzhen-Hong Kong link this month. The shares, still up 59% in March, were among the day's most traded with a turnover of nearly HK$3.8 billion, exchange data show.
The Shanghai Composite Index advanced 0.4% and the Shenzhen equity benchmark gained 0.3%. The yuan slipped 0.1% to 6.9040 against the dollar in offshore trading. The Nikkei Asia300 Index rose 0.3% to 1,171.35.
China Coal Energy jumped 4% as Shenhua's declaration of a special dividend helped lift coal producers. The company on Friday said its President Gao Jianjun has resigned, and that his duties will be performed by vice president Qi Hegang until a new president is appointed. China Coal also reported a nearly 14% increase in February sales of the fuel.
Bank of East Asia rose 0.2% after announcing the acquisition of a 21% stake in Cambodia's Prasac Microfinance Institution for about $78 million.
Belle International Holdings slid 3.3% after warning its net income for the year ended Feb. 28 could drop by 15% to 25%.
Shanghai Electric Group added 1% in the upbeat market. The company reported a 3.6% drop in 2016 net income after the close of trading on Friday and said it won't pay a dividend.
ZTE, also due to report earnings this week, advanced 4.8%, extending its advance this month to 18%. The stock has rallied after pleading guilty to charges by U.S. authorities that it had violated sanctions on Iran and North Korea.
Citic Telecom International Holdings, a unit of Citic, climbed 3.2% after reporting a 6% increase in 2016 earnings on Monday.
-- V. Phani Kumar