China stocks rose Wednesday as investors cheered lower bond prices in debt-strapped Spain and looked forward to revived economic growth in China.
Hong Kong’s Hang Seng Index climbed 1.1% to 20,781, and the index of Chinese companies gained 1.0% to 10,897.
Turnover remained low, reflecting lingering worries about the European debt crisis, according to Ben Kwong, chief operating officer at KGI Asia.
The outlook for China is more positive despite the sharp drop in GDP growth in March. In fact, worse-than-expected expansion seems to have aroused investor confidence.
“The major driver is that most analysts are expecting China economy has already seen its bottom in 1Q12, and it is likely to see some growth in the coming quarters,” Kwong told Equities in an email.
He noted that in addition to improved Chinese economic prospects, mainland markets will benefit from new measures such as an increase in the quota for foreign institutional investment. That will help Chinese brokerages and insurance companies, which invest heavily in the stock market.
Macau gaming plays remain strong, bolstered by a growth rate of more that 20% in the first quarter. End
Hong Kong Blue Chips: +218, +1.1%, to 20,781, 04-18-12, Hang Seng Index
Chinese Stocks in Hong Kong: +103, +1.0, to 10,897, 04-18-12, HSCE Index
Shanghai Stocks: +2.0% to 2,391, 04-18-12, Shanghai Composite Index.
Chinese Stocks in the U.S.: +4.0, 403.2, 04-17-12, Bank of New York Mellon, ADR Index-China
Insight: Hong Kong blue chips rebounded after prices rose for bonds issued by debt-strapped Spain and Mainland markets rose sharply. Late profit-taking trimmed some gains in continued sluggish trading. Chinese Internet company Tencent (TCEHY) surged 3.4% as the planned listing of Facebook lifted the Internet sector. KGI Research
Quotable: “European news will continue to dominate the market and sentiment will remain mixed.” BOCOM International. 4-18-12
Chinese Company to Watch: “COSCO INTL HOLD (CICOY) Net cash of HK$5.7bn or HK$3.7 per share, current value is attractive. Anticipated M&A activities will help to boost its earnings.” KGI Asia. 4-17-12
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For a list of Chinese companies sold in the U.S. and information on each company go to http://www.adrbnymellon.com/dr_country_profile.jsp?country=CN