* HSI +1.9 pct, H-shares +2.9 pct, China shut for holiday
* HSI breaks above 22,800 resistance in strong turnover
* China financial sector reform plays among top gainers
* Sands China up ahead of positive Macau gambling revenue
By Clement Tan
HONG KONG, Jan 2 Hong Kong shares climbed to a
19-month high on Wednesday with the market poised for more gains
after a bill was passed in the United States to avert harsh tax
hikes on most Americans, helping ward off fears of a recession
in the world's largest economy.
Growth-sensitive counters led gains as midday turnover hit
the highest since Dec. 5. More gains could be in store after the
U.S. House of Representatives passed the bill shortly before
trading stopped for the lunch in Hong Kong.
The Hang Seng Index went into the midday break up 1.9
percent at 23,089.9, its highest since June 2011 and decisively
breaking above chart resistance at around 22,800 that has
stymied gains for much of the previous two weeks.
The China Enterprises Index of the top Chinese
listings jumped 2.9 percent to 11,765 points, its highest since
February 2012. Chart resistance is seen at around 11,916, its
Feb. 20 peak.
Both indexes had posted their best annual gains since 2009,
rising 22.9 and 15.1 percent, respectively, in 2012.
"In the short term, U.S. risk premium will come down once a
deal is struck and might trigger some reversal of flows back to
the U.S., but the effects of that will probably be offset by
flows from Japan as the yen continues to weaken," said Hong Hao,
chief equity strategist at Bank of Communications International
"There's also an element of catch up today as people begin
to return from their holidays and realise they have missed out
on the December rally in the China market," Hong added.
An 18 percent gain in December, its best monthly showing
since July 2009, helped propel the CSI300 of the top Shanghai
and Shenzhen listings to its first annual gain in three years.
Mainland markets are shut on Wednesday and will resume trade on
Aluminum Corporation of China (Chalco) jumped 4.2
percent to return to levels not seen since May 2012. It had
finished 2012 up 5 percent, failing to retain much of its gains
from early last year and underperforming the Hang Seng Index.
Metallurgical Corp of China Ltd jumped 4.6 percent
after the company said it will transfer its 51.06 percent equity
interest in loss-making Huludao Nonferrous Group to its
CHINA THEMATIC PLAYS STRONG
Chinese non-bank financial counters extended strength, with
China Life Insurance the top percentage gainer among
Hang Seng Index components, soaring 5.3 percent on Wednesday to
its highest since August 2011.
New China Life Insurance surged 11 percent to its
highest since June 14 after rising 14.6 percent in 2012.
The mainland's securities regulator had said over the
weekend that it plans to allow eligible securities houses and
insurers' asset management units to develop and manage mutual
funds in a bid to reinvigorate an industry struggling to produce
returns for investors.
This follows an announcement last week allowing brokerages
to sell subordinated debt and the Chinese central bank pledging
to quicken the pace of reforming the financial sector that sent
shares of Chinese brokerages soaring last Friday.
Financial sector reforms in China are expected to stay a
dominant theme in 2013, analysts say, as would Chinese
urbanisation-related counters such as property developers, which
were also stronger on Wednesday.
Country Gardens rose 3 percent ahead of the
company's release of its nine-month net profit at midday that
showed the mid-sized property developer posting a 34.4 percent
rise in profit from a year earlier.
Sands China rose 1.8 percent ahead of data at
midday that showed gambling revenue in Macau rose a higher than
expected 19.6 percent in December from a year earlier, boosted
by strong visitation numbers and spending by rich Chinese