Hong Kong's Stocks Rise to Two-Month High as Oil Producers, Insurers Climb

Hong Kong stocks rose, sending the Hang Seng Index to its highest close in two months, as Chinese insurers gained and commodity producers advanced on higher oil and metal prices.

China Life Insurance Co., the nation’s biggest insurer, advanced 1.9 percent after Xinhua News Agency reported China’s insurance premiums may have risen. China Cosco Holdings Co., Asia’s No. 1 shipping line by market value, surged 7.6 percent after Citigroup Inc. raised its rating. Cnooc Ltd., China’s largest offshore oil producer, gained 1.6 percent. PetroChina Co., China’s No. 1 energy producer, rose 1.9 percent after saying output at its southern Iraqi oilfield increased.

“People are slightly more positive about the Hong Kong market than last year,” said Alex Au, managing director of Richland Capital Management Ltd. in Hong Kong, which oversees $300 million of assets. “Because of the market’s underperformance last year, people are expecting a catch-up rally.”

The Hang Seng Index rose 1.5 percent to 24,125.61, its highest close since Nov. 12. The gauge gained 5.3 percent last year, compared with 13 percent by the Standard & Poor’s 500 Index and 8.6 percent by the Stoxx Europe 600 Index.

The Hang Seng China Enterprises Index of so-called H shares of Chinese companies gained 1.6 percent to 13,126.98.

Chinese insurers rose after Xinhua News Agency reported the nation’s insurance premiums may have risen 33 percent from a year earlier to 1.47 trillion yuan in 2010, citing Wu Dingfu, chairman of the China Insurance Regulatory Commission.

Carlyle Cuts Stake

China Life gained 1.9 percent to HK$32.65, and Ping An Insurance （Group） Co., China’s second-biggest insurer, increased 1.9 percent to HK$84.85.

China Pacific Insurance （Group） Co. jumped 5.1 percent to HK$33.90 after Carlyle Group, the world’s second-biggest buyout firm, sold another $1.8 billion of its shares, continuing its exit from the five-year investment.

Carlyle is rewarding investors with a sixfold profit after having made “enough money” when a lockup period expired on Dec. 23, a year after the insurer’s HK$24.1 billion （$3.1 billion） first-time share sale in Hong Kong, according to Ivan Cheung, head of regional insurance at Mirae Asset Securities H.K. Ltd.

Chinese lenders rose after Reuters reported the nation’s banks extended almost 500 billion yuan （$75.7 billion） in new loans in the first week of the month, citing two people with direct knowledge of the figures. That total included about 210 billion yuan in new loans provided by the four state lenders, the report said, citing the two people.

World’s ‘Cheapest’ Banks

Bank of China Ltd., the nation’s fourth-largest bank by market value, increased 1.7 percent to HK$4.23, and China Construction Bank Corp., the second-biggest, gained 1.4 percent to HK$7.20. Industrial & Commercial Bank of China Ltd. advanced 0.7 percent to HK$5.93.

Separately, Guotai Junan Securities Co. said China’s biggest banks will rebound in 2011 after a plunge last year made them the “cheapest” globally and as investors sell overvalued small-capitalization shares.

A measure of financial stocks, which includes insurers and banks, jumped 2.1 percent, the steepest increase among the Hang Seng Index’s four industry groups.

China Cosco surged 7.6 percent to HK$9.36 after Citigroup raised its recommendation on the stock to “buy” from “hold” on potential asset purchases and the container rates outlook.

There is “a fundamentally improving container-shipping outlook,” according to Citigroup analysts Ally Ma and Brian Lam. Carrying cargo boxes may replace commodity shipments as the company’s “major profit driver,” they said.

Oil Prices

China Merchants Holdings International Co., the investor in ports that handle a third of the country’s containers, jumped 4.1 percent to HK$34.05. China Cosco and China Merchants had the two top gains in the Hang Seng Index.

Oil producers extended yesterday’s gains as crude prices rose to the highest level in a week. Cnooc advanced 1.6 percent to HK$19.34 and China Petroleum & Chemical Corp., known as Sinopec, increased 2.1 percent to HK$7.81.

PetroChina rose 1.9 percent to HK$10.52 after saying the company and BP Plc met their 2010 output target for the Rumaila oilfield in southern Iraq, and the group aimed to increase output by more than 10 percent from 1.07 million barrels a day in 2009.

Crude oil for February delivery advanced 2.1 percent to $91.11 a barrel in New York yesterday, the highest settlement since Jan. 3. The London Metal Exchange Index of prices for six industrial metals including copper and aluminum jumped 1.7 percent yesterday, ending four straight declines. Copper futures rose 2 percent yesterday, the biggest gain in almost four weeks.

Miners Gain

Jiangxi Copper Co., China’s No. 1 producer of the metal, gained 2.9 percent to HK$26.95, while Zhaojin Mining Industry Co., a miner based in China’s Shandong province, climbed 3.1 percent to HK$33.30.

The Hang Seng Index rose 3.2 percent this year to yesterday as U.S. economic reports boosted confidence in the world’s largest economy. Shares in the gauge traded at an average 12.9 times estimated earnings at the close yesterday, compared with about 17.2 times at the start of 2010.

Among other stocks that rose, China Southern Airlines Co., Asia’s No. 1 carrier by passenger numbers, gained 1.7 percent to HK$4.75 after saying it expects net income for 2010 to jump by about 15 times from the previous year because of an increase in passenger and cargo transportation services.

Geely Automobile Holdings Ltd., whose parent bought Volvo Cars, jumped 3 percent to HK$3.80 after saying total sales volume for 2010 jumped 27 percent from a year earlier, and boosted its sales target for this year.

Thirty-four stocks rose while 11 fell on the 45-member Hang Seng Index. Futures on the gauge gained 1.9 percent to 24,223.