Hong Kong shares rose 2.57 percent on Wednesday to a near 13-month closing high, powered by banks on growing optimisn about a global economy recovery, ignoring weakness in China stocks as key developer Vanke fell. Bank shares in Hong Kong rose on hopes the sector will among the first to benefit as the economy recovers and after the latest US economic indicators lifted overseas markets.
Brokers said some Chinese banks took almost a year to climb back to levels seen before the financial crisis a year ago. Bank of China climbed more than 4 percent to a 22-month closing high of HK$4.40. China Construction Bank rose 2.5 percent to a 13-month closing high of HK$6.45.
ICBC surged 4.4 percent to a 16-month closing high of HK$6.15 and HSBC was up 3.1 percent to a 16-month closing high of HK$87.40. The benchmark Hang Seng Index rose 536.55 points to 21,402.92, while the China Enterprises Index, which represents top locally listed mainland Chinese stocks, climbed 3.04 percent to 12,525.72.
Cathay Pacific rallied more than 4 percent to a session high of HK$12.36 before closing at HK$12.32, after Hong Kong's flagship carrier reported a strong rebound in passenger traffic in August, the first rise this year. China Huiyuan Juice fell 0.94 percent after it recorded an 81.8 percent fall in first-half earnings on uncertainties arising from a proposed Coca-Cola take-over offer and the negative impact on sales of restructuring and strategic initiatives.
SJM Holdings, flagship company of gaming mogul Stanley Ho, rose about 8.8 percent to an all-time high of HK$4.57 after it said the second half of 2009 had started well with total gaming revenue in Macau rising significantly. New listing China All Access, an communication application solution provider, rose 22.5 percent to a high of HK$1.96 on its trading debut before ending at HK$1.81, still up 13 percent against an issue price of HK$1.60.
China's key stock index fell 1.12 percent on Wednesday, breaking three successive days of gains, with the property sector soft after shareholders of the country's second-biggest developer China Vanke approved a $1.6 billion share offer, which triggered profit-taking.
The Shanghai Composite Index closed at 2,999.710 points, after fluctuating around its key psychological level of 3,000 points during the day. The index edged up 0.23 percent to a new one-month closing high on Tuesday. Losing Shanghai A shares outnumbered gainers by 526 to 404, while turnover picked up to 168 billion yuan ($25 billion) from 160 billion yuan on Tuesday.
China Vanke, the most active stock in Shenzhen, dropped 0.42 percent to 11.90 yuan after the shares were suspended on Tuesday. It said shareholders had approved a new public share offer to raise up to 11.2 billion yuan ($1.6 billion).
Shareholder approval of Vanke's fundraising plans suggests underlying confidence towards the property sector through next year, so its impact on the overall market may be limited. "It is very helpful for Vanke to buy land; the fundraising suggests it is confident about the sales outlook for real estate with the property sector on a solid track for recovery," said Guo Yanlin, head of research unit at Shanghai Securities. Vanke's rivals Gemdale, China Merchants Property and Poly Real Estate Group, who are also rushing to raise money after a government stimulus plan, saw their shares fall around 1 to 3 percent.
Financial shares were weak, with China Life Insurance, the country's top life insurer, losing 2.29 percent to 28.20 yuan, after saying it earned 210.7 billion yuan in insurance premiums in the first eight months of this year. Dalian Dayang Trands, a clothing maker, jumped its third 10 percent daily limit to 13.34 yuan on local news reports of a business tie with Warren Buffett, which was later denied by the company.