Hong Kong’s Stock Index Advances as Raw Material Producers Gain

Jan. 25 （Bloomberg） -- Hong Kong stocks advanced for the first time in four days as raw material suppliers gained on optimism demand in China and Europe will continue to increase.

PetroChina Co., the nation’s biggest oil and gas producer, climbed 1.5 percent as it sought to boost reserves. Jiangxi Copper Co., the country’s largest producer of the metal, increased 0.8 percent after copper futures rose for a second day in London yesterday. HSBC Holdings Plc, Europe’s No. 1 lender by market value, gained 0.6 percent after reports showed Europe’s services and manufacturing industries expanded faster than economists forecast.

“Hong Kong shares have fallen too much in recent days on concerns China will raise interest rates,” said Danny Yan, a Hong Kong-based fund manager at Haitong International Asset Management, which oversees about $400 million. “That concern seems overdone. Hong Kong companies with significant revenues from overseas are benefitting from the global economic recovery.”

The Hang Seng Index increased 0.5 percent to 23,916.11 as of the 12:30 p.m. trading break in Hong Kong, snapping three days of decline. The Hang Seng China Enterprises Index of so- called H shares of Chinese companies gained 0.4 percent to 12,646.59.

The Hang Seng Index dropped 1.7 percent last week, its first weekly decline since the period ended Dec. 17, after China reported faster-than-expected economic expansion during the fourth quarter, spurring concern the government will step up efforts to curb inflation. Shares in the gauge trade at an average 12.9 times estimated earnings compared with about 17.2 times at the start of 2010.

Oil, Metals

PetroChina climbed 1.5 percent to HK$10.68. The company is targeting a 1.5 billion ton increase in proven reserves at its Changqing field, the nation’s second-largest, parent company China National Petroleum Corp. said in its online newsletter today. Cnooc Ltd., the nation’s biggest offshore energy explorer, gained 1 percent to HK$19.02.

Jiangxi Copper advanced 0.8 percent to HK$24.70. Aluminum Corp. of China Ltd., the biggest producer of the metal, increased 1.7 percent to HK$7.62.

Copper prices gained for a second straight session on signs of rebounding demand in China, the world’s largest buyer, and a recovery in Europe, while tin reached a record. The London Metal Exchange Index of six metals including copper and aluminum gained 0.4 percent yesterday, rising for a second day.

HSBC gained 0.6 percent to HK$87.20. Esprit Holdings Ltd., the Hong Kong clothier that counts Europe as its biggest market, rose 0.4 percent to HK$37.50. Yue Yuen Industrial Holdings Ltd., the maker of shoes for Nike Inc., increased 0.6 percent to HK$27. Foxconn International Holdings Ltd., the world’s largest contract maker of mobile-phones, advanced 0.7 percent to HK$5.63.

Europe Growth

A composite index based on a survey of euro-area purchasing managers in services and manufacturing industries rose to 56.3, the highest reading in six months, from 55.5 in December, London-based Markit Economics said in an initial estimate yesterday. A figure above 50 indicates growth. A separate report from the European Union’s statistics office in Luxembourg showed industrial orders jumped 2.1 percent in November from October, exceeding economists’ median forecast.

Tencent Holdings Ltd., China’s biggest internet company, jumped 4.7 percent to HK$199. Tencent will set up a fund to invest in the technology and Internet businesses, Sina.com reported yesterday, citing the company. The size of the investment fund may be about 5 billion yuan （$759 million）, according to the report, which didn’t say where it got the information. Jane Yip, a spokeswoman at Tencent, didn’t return three phone calls and an e-mail seeking comment.

China Resources Enterprise Ltd., the partner of SABMiller Plc, gained 2.1 percent to HK$31.35 after signing a deal with Kirin Holdings Co. to combine their soft-drink assets in China.

Longer Trading Hours

Hong Kong Exchanges & Clearing Ltd., operator of Asia’s third-biggest stock market, rose 0.9 percent to HK$181.20. The company said the city’s Securities and Futures Commission approved its proposal to lengthen trading hours from March.

The exchange will start its trading day at 9:30 a.m. local time and cut its lunch break to 90 minutes from two hours effective March 7, according to yesterday’s statement. The bourse operator said it will cut the midday break to one hour starting March 2012.

Shandong Chenming Paper Holdings Ltd., the maker of paper products, climbed 3.1 percent to HK$6.66. The company said net income rose 39 percent last year from a year earlier to 1.2 billion yuan.