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Hong Kong shares lifted by China Mobile, China stocks inch up
May 20, 2014 / 4:56 AM / 4 years ago

Hong Kong shares lifted by China Mobile, China stocks inch up

* HSI +0.7 pct, H-shares +0.1 pct, CSI300 +0.1 pct

* China Mobile hits four-month high after Goldman upgrade

* ChiNext gains on expectations of smaller number of IPOs (Updates to midday)

By Grace Li and Chen Yixin

HONG KONG/SHANGHAI, May 20 (Reuters) - Hong Kong shares rose on Tuesday, helped by China Mobile after a broker upgrade pushed shares of the Chinese telecom giant to their highest since the start of 2014.

China shares eked out slim gains in a choppy Tuesday trade, buoyed by ChiNext Composite Index stocks after the country’s top securities regulator said it anticipates 100 initial public offerings (IPOs) between June and the end of the year, a smaller amount of than some investors have feared.

Their concern has been that a bigger IPO wave could spur selling of existing stocks, depressing their prices.

By midday, the Hang Seng Index was up 0.7 percent at 22,867.84 points. The China Enterprises Index of the top Chinese listings in Hong Kong was up 0.1 percent.

The CSI300 also inched up 0.1 percent. The Shanghai Composite Index rose 0.2 percent at 2,008.43 points, rebounding from a three-week low on Monday, during which the index briefly fell below the 2,000-point mark.

China Mobile Ltd, the top boost of Hong Kong’s main index, rose 2.4 percent to its highest level since Jan. 3 after Goldman Sachs put the world’s largest telecom carrier by subscriber base on its conviction buy list.

Goldman raised its 12-month target price by 13 percent to HK$95.00 ($12.20) saying improvement in the company’s average revenue per user can be expected as it continues to build up its high-speed LTE network in China. At midday, the stock was at HK$78.50.

Competitor China Unicom Hong Kong Ltd, on which Goldman has a neutral rating, was down 2.6 percent, Tuesday’s biggest drag on the index.

In China, the ChiNext of mostly high-tech start-ups listed in Shenzhen gained 1.7 percent.

State media on Monday reported the chairman of the China Securities Regulatory Commission as giving 100 as the number of IPOs expected by the end of the year.

“This volume is much lower than market had expected, which supported the ChiNext’s jump this morning,” said Xiao Shijun, analyst at Guodu Securities in Beijing.

But Xiao added that most market players were still doubtful about a rise in the index as China’s economic fundamentals remained weak.

Great Wall Motor Co Ltd gained 1.8 percent in Hong Kong after the automaker late Monday announced a deal to set up a production base in Russia. Its Shanghai shares were also up 0.9 percent in Shanghai. (Reporting by Grace Li; Editing by Richard Borsuk)

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