* HSI +0.7 pct, H-shares +0.6 pct, CSI300 +0.4 pct
* HKEx at highest since May, trading volumes seen recovering
* China Mobile posts 1.3 rise in Q3 profit after-hours
* Greentown surges after Goldman Sachs names it conviction
(Updates to close)
By Clement Tan and Vikram Subhedar
HONG KONG, Oct 22 Hong Kong stocks reached their
highest close in 2012 on Monday, rising on expectations of more
capital inflows into the territory and growing hopes of a
recovery in China's domestic markets.
Money flowing into Hong Kong forced the territory's monetary
authority to intervene in the currency market on Saturday for
the first time in three years after the Hong Kong dollar
pushed against the top-end of its trading band.
The Hang Seng Index ended up 0.7 percent at
21,697.55. Until Monday, the year's highest close was 21,680.08,
on Feb. 29.
The Hong Kong benchmark extended its run of gains to eight
straight days, the longest such streak since June 2010. The
China Enterprises Index of the top Chinese listings in
Hong Kong rose 0.6 percent.
Earlier, the CSI 300, made up of the top Shanghai
and Shenzhen listings, closed up 0.4 percent while the Shanghai
Composite Index finished up 0.2 percent. Both indices
reversed earlier losses to end higher, thanks to strength in
large-cap banking and energy shares.
"For the Chinese economy as a whole, the worst is almost
over," said Lewis Pan, chief investment officer of Pride
Investments, adding that he expects more policy measures after
the country's new leadership is finalized at next month's party
In one sign of improving investor sentiment, shares of local
bourse operator Hong Kong Exchanges & Clearing (HKEx),
seen by some traders as a barometer of risk appetite, rose 3.5
percent to their highest since May 3.
HKEx shares have suffered this year as trading volumes have
fallen and share offerings dried up. HKEx is now up 1.2 percent
in 2012 year compared to the 17.7 percent rise for the Hang
"I think you can tell from HKEx today that (foreign) money
remains quite positive on China. There's some profit-taking
today, but volumes are quite small," said Jackson Wong, Tanrich
Securities' vice-president for equity sales.
Bucking the overall positive trend shares of Chinese oil
majors, PetroChina fell 1.3 percent in
Hong Kong and 1.1 percent in Shanghai on weaker crude prices.
EARNINGS BACK IN FOCUS
China Mobile, the country's largest mobile
operator, got the third quarter earnings season for Hong Kong
blue chips started. After market hours, it reported a 1.3
percent rise in profit for the period.
Its shares closed up 1.1 percent.
China Mobile is currently trading at an 8 percent discount
to its historic 12-month forwards earnings multiple ,and a 23
percent discount to its 12-month forward price-to-book value,
according to Thomson Reuters StarMine.
"It seems to us that China Mobile is a utility stock now and
the growth story is over," said Pride Investments' Wan, adding
that his fund does not own the stock.
Chinese property developer Greentown China Holdings
surged 7.5 percent after brokerage Goldman Sachs
listed the stock in its list of Asia-Pacific "conviction buys."
Goldman Sachs said the company had consistently improved its
monthly sales performance over the third quarter, suggesting
that Greentown had overcome challenges it faced due to a
stretched balance sheet.
($1 = 6.2538 Chinese yuan)
(Editing by Richard Borsuk)