Hong Kong stocks rose 0.6 percent on Thursday, tracking firmer regional markets, after data showed surprisingly strong US business spending, but offshore oil producer CNOOC fell as crude prices declined. PCCW Ltd jumped 9.4 percent after the city's dominant fixed-line operator said it planned to fold its telecoms, media and information technology businesses into a holding company and offer 45 percent of that new firm to investors.
"PCCW's reorganisation is likely to be a positive move as it aims to introduce new investors," said Pactrick Yiu, associate director at CASH Asset Management. Most-traded China Mobile rose 1.5 percent to HK$114.6. It had fallen more than 13 percent through Wednesday since Beijing announced a restructuring in the country's telecommunications sector last Friday.
Trading was thin as several Chinese telecom stocks - China Unicom, China Netcom and China Telecom - remain suspended. "The market is pretty quiet today as an investigation into warrant trading dampened people's interest in derivatives," said Andrew To, sales director at Tai Fook Securities.
Hong Kong's anti-corruption watchdog was investigating a suspected stock warrant scam and arrested more than 20 staff from securities houses, local newspapers reported on Thursday. The news also sent Hong Kong Exchange's shares 1.6 percent lower.
The benchmark Hang Seng Index ended up 0.55 percent at 24,383.99, helped by a 4.2 percent rise in Asia's top refiner Sinopec. But the index's gains were capped by a 3.2 percent loss in CNOOC.
Mainboard turnover amounted to HK$64.09 billion ($8.21 billion), up slightly from HK$60.21 billion on Wednesday. Trading volume of warrants accounts for over 20 percent of daily market turnover and brokers said the scam could further shrink the stock market's already low turnover.
The China Enterprises Index of Hong Kong-listed mainland companies, or H shares, rose 1.03 percent to close at 13,511.86. Airline shares also cheered lower oil, with Cathay Pacific climbing 2.7 percent and Air China gaining 2.15 percent. But film and entertainment firm Shaw Brothers lost nearly 7 percent to HK$20.7. The company said no agreement had been reached on a sale of its stock by its parent company, and denied media reports on Wednesday the parent had sealed a deal to sell a 26 percent stake in a subsidiary.
Property firm Great Eagle jumped as much as 10 percent after it sold the Langham Place Mall, office tower and carparks to Champion REIT for HK$12.5 billion. The stock closed up 1.6 percent at HK$26.10. Bulk shipping firms China Shipping Development soared 5.14 percent and China COSCO rose 1.85 percent on renewed interest in the sector in anticipation of Wah Kwong Shipping's planned Hong Kong IPO in June.
ZTE Corp, a leading global provider of telecommunications equipment and network solutions, surged 3.9 percent after it said it had been selected by Zapp, Romanias fourth largest mobile operator, to roll-out a commercial network.
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