Hong Kong’s market will be closed for the Labour Day holiday on Wednesday, while China’s onshore stock exchanges are closed the whole week.
Home appliance maker Haier Smart Home surged 8.5 per cent to HK$29.35 after saying that first-quarter profit increased 20 per cent from a year earlier. CNOOC advanced 4 per cent to HK$20.55, and China Petroleum and Chemical Corp, also known as Sinopec, rose 3.2 per cent to HK$4.82.
“Lots of positive factors have been building up for Hong Kong stocks, such as the extremely low valuations, more buy-backs and dividend payouts and easing of earnings forecast cuts,” said Zhao Hongmei, an analyst at Zhongtai Securities. “Whether the rally can hold up rests on the improvement in China’s economic fundamentals. We should be more positive on Hong Kong stocks now.”
Hong Kong’s market is the best performer among major markets globally this month, and the manufacturing report is expected to add further impetus. Sentiment on local stocks has taken a turn for better after overseas investors returned to the market, diversifying beyond Japan and India where valuations are stretched. Meanwhile, China’s securities regulator this month pledged to support the offshore market by expanding the scope of cross-border investment products and encouraging more listings of domestic companies.
Property developer China Overseas Land and Investment jumped almost 30 per cent this month, making it the best performer on the Hang Seng Index, while peer China Resources Land surged 16 per cent. Both were buoyed by speculation that Beijing will roll out sweeping relief measures to bail out the property market.
Other major Asian markets all traded higher. Japan’s Nikkei 225 climbed 1.4 per cent, while South Korea’s Kospi rose 0.6 per cent and Australia’s S&P/ASX 200 added 0.2 per cent.