Hong Kong-listed China plays hit their second straight record on Friday and logged their best weekly gain since December, as the recently underplayed mainland financials reclaimed the spotlight and Aluminium Corp of China (Chalco) led a rally in resource stocks.
Chalco, which has gained 25 percent in the last three days, hit an all-time high on momentum spurred by this week's news of potential asset injections and an upgrade by Goldman Sachs. A pair of new issues delivered mixed debuts, with optical components maker Sunny Optical Technology (Group) Co Ltd lagging expectations.
Pharmaceutical firm United Laboratories International Holdings Ltd performed better than expected. Shares in mainland companies listed in Hong Kong, or H shares, opened at a fresh record and hardly looked back, leapfrogging the uncharted territory of 11,300 to cross 11,400 for the first time. "Right now, we are in a better position," said Tat Auyeung, fund manager at Apex Capital Management. "We are seeing some of China's tightening measures beginning to work, so there's a better underlying tone."
Blue chips ended at an all-time closing high of 21,017.05, up 0.7 percent and could soon have their turn at an all-time high. The main index is about 0.3 percent away from that mark. "Turnover has been strong so the momentum is good. The Hang Seng Index will soon test historical highs," said Patrick Shum, strategist at Karl-Thomson Securities, adding that it could reach 21,500 points by next week.
The benchmark Hang Seng Index closed up 2.5 percent for the week. The China Enterprises Index of H shares jumped 2.4 percent to 11,443.91 for a 5.7 percent weekly gain, its best since the end of last year. It hit an intraday high at 11,491.27.
Total turnover was the second-highest ever at HK$84.5 billion (US $10.8 billion), up from Thursday's HK$69.8 billion. Mainland financials were the day's top traded shares. China Construction Bank surged 3.2 percent to HK$4.91 after the country's third-biggest lender said it would issue up to 9 billion A shares in Shanghai.
Industrial & Commercial Bank of China, the day's second-most traded stock after China Construction Bank, rose 1.7 percent to HK$4.25. China Life, the biggest boost to the H shares, vaulted 3.4 percent to HK$25.75.
Among resource shares, Chalco, which Goldman has added to its conviction buy list, added 8.4 percent to its recent sharp gains, settling at HK$13.2. Shares in China Molybdenum Co raced up 12.3 percent to HK$13.70 in heavy volume after Deutsche Bank initiated coverage of the stock with a buy rating and a target price of HK$18.
Chinese optical components maker Sunny Optical, which raised US $132 million in a Hong Kong IPO, ended at HK$4.02 for a 5.2 percent gain above its HK$3.82 IPO price, having traded between HK$3.94 and HK$4.22. United Laboratories, after raising US $106 million in a Hong Kong IPO, finished at HK$3.61, or 31.3 percent higher than its HK$2.75 IPO price, having traded between HK$2.84 and HK$3.7.
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