Hong Kong stocks rose, reversing a drop, on optimism China will ease tightening measures as Europe’s debt crisis threatens economic growth.
China Resources Land Ltd., a state-controlled developer, jumped 7.5 percent. China Overseas Land & Investment Ltd., controlled by the nation’s construction ministry, advanced 5.3 percent. Hong Kong developers gained ahead of a government land auction that will take place this afternoon. Aluminum Corp. of China Ltd., the nation’s largest aluminum producer, gained 4.3 percent after metal prices rose.
“People are speculating tightening may not be as severe, particularly for the property sector,” said Tat Auyeung, a fund manager at Apex Capital Management in Hong Kong, which oversees about $400 million. “Still, the situation in Europe is unclear, and there’s concern about a contagion effect.”
The Hang Seng Index climbed 0.5 percent to 19,638.66 as of 12 p.m. local time, after retreating as much as 0.4 percent.
The Hang Seng China Enterprises Index, which tracks the so- called H shares of Hong Kong-listed Chinese companies, advanced 1.8 percent to 11,245.80.
Shares on the benchmark Hang Seng Index are priced at an average 12.9 times estimated earnings, down from 18 times on Nov. 16, when the index closed at its highest level for 2009, according to Bloomberg data. Concern over budget deficits in Europe and speculation China’s government will further tighten money supply have contributed to a 14 percent drop in the Hang Seng from its November high.
Chinese Developers Surge
China Resources Land surged 7.5 percent to HK$15. China Overseas Land advanced 5.3 percent to HK$15.50. They posted the biggest jumps on the Hang Seng Index. Guangzhou R&F Properties Co., the largest real estate company in the southern Chinese city, rallied 8.1 percent to HK$9.57, the largest gain on the H- share index. China National Building Material Co., a maker of building materials, climbed 4.4 percent to HK$11.90.
China should be cautious in introducing new tightening measures because the current global economic environment is complex, Xu Lianzhong, an official with the National Development and Reform Commission’s price monitoring center, wrote in a commentary published today in the China Securities Journal. The European debt crisis is one of many uncertainties that China faces, Xu wrote.
Sun Hung Kai Properties Ltd., the city’s largest developer by market value, rose 1.4 percent to HK$102.6. Henderson Land Development Co., controlled by billionaire Lee Shau-kee, climbed 2.6 percent to HK$44.75.
Land Sale
The city’s developers may be cautious about paying too much for the second piece of land auctioned by the government this fiscal year as the pace of sales increases amid efforts to cool home prices, analysts said. The auction today of an 8,900- square-meter （95,800 square feet） site in northern Hong Kong will likely fetch HK$1.37 billion （$176 million）， according to the median estimate of four surveyors interviewed by Bloomberg.
China Construction Bank Corp., the country’s No. 2 bank by market value, advanced 1.1 percent to HK$6.22. The lender will delay its equity-based fundraising until the end of this year or early 2011, Chairman Guo Shuqing was reported as saying by the official Xinhua news agency, which cited China National Radio.
HSBC Holdings Plc, Europe’s biggest bank, fell 1.3 percent to HK$71.70 after the Sunday Telegraph said Stephen Green plans to step down as executive chairman later this year, and will be succeeded by John Thornton, without saying where it got the information.
Metals Stocks Climb
Chalco, as Aluminum Corp. is known, gained 4.3 percent to HK$6.31. Jiangxi Copper Co., China’s biggest producer of the metal, rose 3.4 percent to HK$15.02.
The London Metal Exchange Index, which tracks six metals, including copper and aluminum, advanced 2.9 percent on May 21.
Air China Ltd., the nation’s largest international carrier, rose 4.7 percent to HK$7.17. China Southern Airlines Co., the country’s biggest carrier by fleet size, climbed 2.9 percent to HK$3.22.
China’s airlines will be able to set their own prices for first and business class tickets on domestic flights from June 1, the National Development and Reform Commission said May 21.
Angang Steel Co., the biggest Chinese steelmaker traded in Hong Kong, suspended trading in its shares, pending an announcement, according to a statement. The stock surged 5.8 percent to HK$10.40 before trading was halted.
More than two stocks climbed on the 43-member Hang Seng Index for each that fell. Futures on the gauge rose 0.7 percent to 19,570.
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