Hong Kong Stocks Advance, Led by Chalco on Earnings

Hong Kong stocks rose for the fifth time in six days, led by Aluminum Corp. of China Ltd. after saying it expects to return to profit and by banks on reports of overseas expansion.

Aluminum Corp., the nation’s largest maker of the metal and also known as Chalco, jumped 6.9 percent after saying it will return to profit on increased market prices and sales volumes. Bank of China Ltd., the country’s fourth-largest bank by assets, gained 0.9 percent after saying it could build its overseas operations with acquisitions of foreign banks. Wynn Macau Ltd., the Hong Kong-listed casino unit of Wynn Resorts Ltd., advanced 4.6 percent after CLSA Ltd. estimated Macau’s casino revenue will rise to a record.

The Hang Seng Index climbed 0.8 percent to 24,351.60 as of 12:26 p.m. local time, extending this year’s gains to 5.7 percent. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies gained 1 percent to 13,068.33.

“Normally banks will follow their customers, and if their business takes them overseas, they will follow,” said Tim Leung, who helps manage about $1.5 billion at IG Investment Ltd. in Hong Kong. “It’s a natural trend. Individual activities are moving the market today, rather than broad themes.”

The Hang Seng Index rose for a four-straight week last week as banks extended their gains and concern about Europe’s debt crisis eased. Shares in the gauge traded at an average 13.1 times estimated earnings at the close yesterday, compared with about 17.2 times at the start of 2010.

Cost Cuts

Chalco jumped 6.9 percent to HK$7.61, posting the biggest increase on the Hang Seng index. The company expects to have turned to profit in 2010 on increased market prices and sales volume, according to a statement from the company to the Hong Kong stock exchange. The Chinese aluminum producer also cited cost cuts, and didn’t provide profit figures in the statement. The stock’s rating was also raised to “neutral” from “underperform” by Macquarie Group Ltd.

A measure of finance company stocks, including banks and insurers, had the biggest gain today among the Hang Seng index’s four industry groups.

Bank of China, which receives about 79 percent of its revenue from mainland China, rose 0.9 percent to HK$4.28. The lender may acquire foreign banks to build on its overseas operations, Chairman Xiao Gang said at the Asian Financial Forum in Hong Kong.