Hong Kong blue chips rose 1.3 percent on Friday, reversing some of their losses from last session's sell-off, with China Mobile leading the gains before its first-quarter earnings report due later in the day.
China plays jumped 1.5 percent, creating an auspicious climate for the listing of Country Garden Holdings Co, which raised US $1.66 billion in the biggest-ever IPO by a Chinese developer. Its gains fired up other mainland property plays.
"The karma's been restored - it feels fairly firm," said John Schofield, director at Tempus Investment. But the market has yet to recoup all of Thursday's losses, which were sparked by worries that China's strong economic growth could prompt authorities to take further tightening measures.
"It's possible there will be a rate hike ahead of the Golden Week holiday," Schofield said, referring to China's week-long holiday at the beginning of May. But current levels had more or less factored in any further tightening measures in the near term, he said.
The benchmark Hang Seng Index closed up 266.88 points to end at 20,566.59, marking a 1.1 percent weekly gain. The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, gained 150.52 points to 10,179.87, a 0.2 percent gain for the week.
Country Garden's debut helped boost turnover to a heavy HK$63.1 billion (US $8.1 billion), nearly even with Thursday's levels. Country Garden shares, the day's most active, traded between HK$7.0 and HK$7.35 before settling at HK$7.27 for a 35.1 percent gain above its issue price of HK$5.38.
Other mainland property shares shot up on Country Garden's coat tails. Shimao Property climbed 2.1 percent to HK$19.10 in heavy trade and Guangzhou R&F Properties Co Ltd was also active, vaulting 4.5 percent to HK$19.62. Guangzhou R&F said on Friday it proposed to issue up to 450 million yuan-denominated shares to be listed on the Shanghai stock exchange. China Mobile, the biggest boost to the blue chips, jumped 3.3 percent to HK$74.90. Mainland banks and insurers also gained ground, with China Life advancing 2.3 percent to HK$24.85, and China Construction Bank up 2.1 percent at HK$4.88.
Sinopec Shanghai Petrochemical Co Ltd leapt 6.1 percent to HK$4.86 and Sinopec Yizheng Chemical Fibre Co Ltd surged 6.3 percent to HK$2.38 amid speculation that major stakeholder Sinopec Corp could buy them out in a privatisation bid. Sinopec, Asia's largest refiner, sold US $1.5 billion in convertible bonds on Tuesday in the largest such issue by a Chinese company. Sinopec closed up 3.3 percent at HK$6.92.
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