* HSI +1.8 pct, H-shares +1.5 pct, CSI300 +0.7 pct
* Gains came in the highest Shanghai volume in almost two
* China April home price data lifts property sector
* Tencent hits another record high, surpasses HK$300 mark
By Clement Tan
HONG KONG, May 20 Hong Kong shares jumped to
their highest since early February on Monday, led by Chinese
cyclical counters, as investors chased a resurgent mainland
China market on their return from a Friday holiday, which posted
a fourth-straight day of gains.
The Chinese property sector was also lifted by data on
Saturday that showed average new home prices rose in April at
their fastest year-on-year pace in two years, albeit at a slower
rate in April than in March.
The Hang Seng Index climbed 1.8 percent to 23,493
points, its highest close since Feb. 4.
The benchmark is now about 2 percent below its 2013
intra-day high of 23,944.7 on that same day, after having
rebounded more than 9 percent from an April low.
The China Enterprises Index of the top Chinese
listings in Hong Kong has also bounced about 9 percent from its
April low, but is still some 10 percent from its February highs.
The H-share index rose 1.5 percent on Monday from a two-week
On the mainland, the CSI300 of the leading
Shanghai and Shenzhen listings rose 0.7 percent, while the
Shanghai Composite Index gained 0.8 percent. With their
fourth daily gain, both closed at their highest since end-March.
But while gains in Shanghai came in the strongest bourse
volume since end-March, some 42 percent above its average in the
last 20 days, Hong Kong turnover faded after an early morning
burst as markets reopened after a public holiday last Friday.
"Investors are catching up to the big gains in other markets
while Hong Kong stayed closed on Friday, but the volume driving
some of today's gains were quite surprising," said Jackson Wong,
Tanrich Securities' vice-president for equity sales.
Despite net flows into China-dedicated funds turning
positive in the week ended May 15, Macquarie said it is too
early to conclude if this constitutes a trend given the volatile
flows in China exchange-traded funds in recent weeks.
While retail net redemptions intensified to $98 million from
$81 million from the week before, institutional investors
committed $8.5 million to China mutual funds and $254 million to
China ETFs, they said in a note issued on Monday.
China property counters rose after Saturday's data,
shrugging of a report in the official China Securities Journal
that the country may expand a property tax trial to several
cities this year that may be applied on newly purchased homes.
China Overseas Land climbed 2.8 percent, while
China Resources Land jumped 3.7 percent. Both Hong
Kong-listings have more than recovered from an early March
wobble after the outgoing Chinese leadership announced fresh
curbs on the sector.
On the mainland, investors saw the robust data as an
opportunity to take some profits on the Chinese property sector,
while piling into sectors likely to benefit from robust home
demand such as electrical appliances.
In Shenzhen, Gree Electric surged 6.4 percent,
while China Vanke, the country's largest listed
developer by sales, fell 1.9 percent after closing last Friday
at its highest since Feb. 5.
CHASING LAGGARD BETA PLAYS
Onshore Chinese markets had climbed sharply last Friday,
triggering some short covering in Chinese coal counters in Hong
Kong on Monday, traders said.
In a note last Friday, Credit Suisse analysts said a plan to
restrict low-quality thermal coal imports into China is likely
to be "mildly positive" to the domestic market.
Yanzhou Coal jumped 4.1 percent in Hong Kong,
paring 2013 losses to 36.1 percent. China Coal climbed
3.5 percent, while China Shenhua Energy jumped 3.2
China Mengiu Diary surged 10.4 percent to its
highest since December 2011 after Danone Group agreed
to invest 325 million euros ($417 million) in two deals with the
company, marking a comeback for the French group in China where
scandals have hurt confidence in food safety.
Tencent Holdings spiked 6.3 percent to another
record high, extending gains after robust quarterly earnings
last Wednesday and sending its stock price above HK$300, more
than the average target price of HK$290.90 among the 34 analysts
that cover the stock, according to Thomson Reuters StarMine.