A surge in Mainland markets Monday pushed China stocks in Hong Kong to a 22-month-high close.
After swinging up-and-down last week, the Hang Seng Index got enough of a bounce higher to edge past the previous best of 23,399 on January 3, rising 0.4% Monday to 23,413. H Shares continued to outperform: the index of Chinese stocks jumped 1.4% to 12,004.
A-shares rebounded from a sharp decline Friday, with the Shanghai Composite Index leaping 3.1% to 2,312, breaking stubborn resistance at 2,300.
Giving extra oomph to H shares was the start of talks to expand investment in Hong Kong by qualified domestic Chinese institutions, according to Jackson Wong. Many Chinese companies sell both H shares in Hong Kong and A-shares in Shanghai and Shenzhen. Wong pointed out to Equities in an email that Mainland investors would likely scoop up the many H shares that are selling at big discounts to A-share counterparts.
Those companies include oil production machinery maker Shandong Molong (SHANY), which rose 15% Monday, and Yizheng Chemical (YZCFF), up 3.7%.
The rest of the week is likely to trade in a fairly narrow range until Friday, Wong said, when Chinese GDP and other economic figures will be released. End
DAILY FIX
Hong Kong Blue Chips: +149, +0.4%, to 23,413, 1-14-13, Hang Seng Index
Chinese Stocks in Hong Kong: +161, +1.4%, to 12,004, 1-14-13, HSCE Index
Shanghai Stocks: +69, +3.1% to 2,312, 1-14-13, Shanghai Composite Index.
Chinese Stocks in the U.S.: -3.3, 410.2, 1-11-13, Bank of New York Mellon, ADR Index-China
Insight: A surge in Mainland A-shares lifted Hong Kong stocks higher in continued brisk turnover. Healthy Mainland markets helped brokerages: Citic Securities ((CIIHY) +6.2%. KGI Research
Quotable: “Hong Kong shares may see range bound earlier next week, as investors would stay on the sidelines prior to the release of some key economic data from China, including gross domestic product (GDP) growth, industrial production and retail sales on next Friday (18th January). Besides, investors will also keep an eye on the fourth quarter report of a number of financial giants in the US such as JP Morgan Chase and Goldman Sachs.” BEA Securities. 1-11-13
Chinese Company to Watch: Natural gas, infrastructure company, BEIJING ENT (BJINY) “Amid steady gas supply in Beijing, prospective P/E of 18x, below peer.” KGI Asia. 1-14-13
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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
