* HSI up 0.8 pct on the day, up 3.6 pct on the week
* CSI300 up 0.7 pct on Friday, up 0.7 pct this week
* Chinese property sector up in strong volumes vs weak HK
* SAIC at two-week high, Volkswagen reportedly to up China
By Clement Tan
HONG KONG, Nov 23 Hong Kong shares advanced on
Friday in their best week in 2-1/2 months, buoyed by a resurgent
mainland Chinese market that ended near highs for the week as
investors cheered pro-reform remarks made by top officials.
The Hang Seng Index rose 0.8 percent to 21,914
points, its highest close since Nov. 7. The China Enterprises
Index of the top Chinese listings in Hong Kong was 1.1
percent higher. Both rose 3.6 percent this week.
In the mainland, the CSI300 Index of the top
Shanghai and Shenzhen listings climbed 0.7 percent on the day
and 0.7 percent on the week. The Shanghai Composite Index
gained 0.6 percent on Friday and 0.6 percent this week.
"Comments from the Vice-Premier have definitely bolstered
sentiment today, reassuring investors that the incoming top
leaders are committed to moving towards reform as the country
moves into a new phase of economic development," said Chen Yi, a
Shanghai-based analyst with Xiangcai Securities.
Vice-Premier Li Keqiang stressed the role of reform in
China's social and economic development, calling for pioneering
measures and a bigger role for the market, according to comments
carried in the state-run China Securities Journal on Friday.
This came a day after the country's finance minister was
quoted by state news agency Xinhua as saying that property taxes
will be gradually introduced and be part of a broader reform of
China's fiscal policy.
The comments helped boost sentiment, with the Chinese
property stocks in Hong Kong posting strong gains for a third
Evergrande jumped 5.5 percent, recovering from
Thursday's losses triggered by a newspaper reported that it had
cut prices by 15 percent to meet its annual sales target.
Longfor Properties, another Chinese property name
which bucked sector strength earlier this week, recovered from
losses over fears of a change of management. Shares rose 4.2
Two Hong Kong-based dealers also said there was market talk
of a Chinese reserve rate cut over the weekend, which first
started circulating on Wednesday, despite mainland money markets
indicating little need for such a move.
China's key 7-day money rate fell to its lowest level in
over a month, shrugging off the central bank's slight drain of
funds through open market operations, as traders said fiscal
deposits entering the system were pumping in significant
SAIC Motor jumped 3 percent to its highest since
Nov. 12 in Shanghai after local media reported one of its joint
venture partner,Volkswagen <AG VOWG_p.DE>, plans to speed up its
expansion in China.
The positive end to the week for mainland markets, where
benchmark indexes are set for a third-straight annual loss,
buoyed A-share proxy plays such as Chinese insurers, as
investors chased the week's laggards.
Insurers are seen proxys because of their large investments
in mainland stock markets, where the Shanghai Composite Index
and CSI300 are still down 7.8 and 6.5 percent, respectively. The
Hang Seng Index and China Enterprises Index, by
contrast, are up 18.9 and 6.7 percent.
On Friday, China Life Insurance was up
1.6 percent in Hong Kong and 2.5 percent in Shanghai. Its
smaller rival, Ping An jumped 1 percent in
Hong Kong and 1.7 percent in Shanghai.
LIQUOR MAKERS TRIM WEEKLY LOSSES
This week's gains were the first in three weeks for stock
indexes in both China and Hong Kong. But gains came in weak
The Hang Seng Index posted its best week since it jumped 4.2
percent in the week of Sept 10-14, but gains this week came in
just more than half of the turnover than in that September week.
In Shanghai, this week's volume was the weakest since the
June 16-20 week, with most of it concentrated on the selloff
involving booze makers after Jiugui Liquor was
implicated in press reports that it had excessive amounts of
potentially toxic substances in its products.
Jiugui's Shenzhen shares, suspended since Monday, slumped
the maximum 10 percent on the resumption of trade on Friday. The
company apologised in an exchange filing late on Thursday,
promising to resolve the issue, according to state news agency
Xinhua, after official tests substantiated earlier allegations.
But others recovered some ground.
Kweichow Moutai rose 2.3 percent, trimming
weekly losses to 1 percent. Up as much as 28 percent on the year
before November, it is now up 15 percent in 2012.
Wuliangye rose 0.9 percent, rebounding off its
lowest level in more than two years recorded on Thursday to snap
a six-day losing streak. Wuliangye slumped 10.4 percent this
week, its worst weekly showing in nearly four years.