Hong Kong Stocks Advance; Chalco Surges on Africa Mine Deal

Hong Kong Stocks Advance; Chalco Surges on Africa Mine Deal

Hong Kong stocks rose, erasing declines, as Aluminum Corp. of China Ltd. rallied after its parent agreed to buy a stake in an African iron-ore mine, countering a drop in Orient Overseas (International) Ltd.

Aluminum Corp., China’s largest maker of the lightweight metal, rallied 3.3 percent, reversing a drop of as much as 2.3 percent. Orient Overseas retreated 2.9 percent after Hong Kong’s biggest container line posted its first annual loss in 11 years. New World Development Co. advanced 2.2 percent, leading gains among developers, after a report showed the city’s luxury-home prices have gained this year.

“There’s good reason to believe that macro growth would be good, but the optimism is slightly less on the markets, and a lot of that is priced in,” Manpreet Gill, Singapore-based strategist for Asia at Barclays Wealth, said in a Bloomberg Television interview. “On a relative basis I’d have a little bit more developed markets at this point in time than in emerging.”

The Hang Seng Index climbed 0.2 percent to close at 21,370.82, after falling as much as 0.3 percent. The gauge has gained 0.8 percent this week. Shares on the measure are priced at an average 14.2 times estimated earnings, down from 18.1 times on Nov. 16 when the index closed at its highest level for 2009, according to Bloomberg data. Concerns over China’s policies to tighten money supply have contributed to a 6.9 percent drop in the stock benchmark from its November high.

The Hang Seng China Enterprises Index, which tracks the so- called H shares of Hong Kong-listed Chinese companies, advanced 0.4 percent to 12,262.36.

Orient Overseas

Aluminum Corp., known as Chalco, jumped 3.3 percent to HK$8.40, the sharpest gain on the Hang Seng Index. Parent Aluminum Corp. of China agreed to pay $1.35 billion for a stake in Rio Tinto Group’s Simandou iron-ore project in Guinea. Chinalco, as the state-owned company is known, signed a non- binding accord to acquire a 45 percent share of the project by funding development over the next two to three years, Rio said.

Orient Overseas, Hong Kong’s biggest container line, retreated 2.9 percent to HK$58. The $402.3 million net loss in 2009 it reported today compared with net income of $272.3 million a year earlier, the company said.

New World, a developer controlled by billionaire Cheng Yu- tung, gained 2.2 percent to HK$15.70. Cheung Kong (Holdings) Ltd., Hong Kong’s second-biggest developer by market value, advanced 1.1 percent to HK$99.75. Hang Lung Properties Ltd., this year’s best performer on the Hang Seng Property Index, rose 1 percent to HK$31.80.

Luxury Prices Rising

Luxury home prices in Hong Kong have risen 8.2 percent this year, signaling the government’s measures to cool the sector are not working, according to one of the city’s biggest property agencies. The average sale price of existing luxury homes in March is HK$11,823 ($1,523) a square foot from December’s HK$10,931, according to transactions at 30 of Hong Kong’s main such projects, Centaline Property Agency Ltd. said in a report.

China Eastern Airlines Corp. climbed 4.2 percent to HK$3.76. The carrier will receive more than 30 planes this year, President Ma Xulun said. The carrier will also get about 50 percent of the additional flights that open up nationwide as the summer season begins, helped by the opening of a new terminal in Shanghai’s Hongqiao airport, he said.

Hang Seng Index futures rose 0.2 percent to 21,321. Twenty- six stocks climbed while 17 dropped on the 43-company gauge.