HONG KONG: Hong Kong shares rose on Friday, sealing a second consecutive weekly advance, as a rebound for Chinese equities and the keenly awaited passage of a U.S. tax bill lifted sentiment.
The Hang Seng Index rose 0.7% to 29,578.01 on Friday, ending the week 2.5% higher. Snack maker Want Want China Holdings and Ping An Insurance Group led gains on the index this week, rising 11.4% and 7.1%, respectively. Sunny Optical Technology Group, a supplier to Apple, was one of the four Hang Seng Index component stocks to decline this week, shedding 2.4%. Disappointing November shipments have hurt demand for the stock in recent days. In Friday’s trading, Want Want China rose 3.5% and Ping An added 0.5%, while Sunny Optical dropped 1% to HK$99.55, falling below HK$100 for the first time since Aug. 14.
Turnover in Hong Kong was tepid ahead of the long holiday weekend, with 71.8 billion Hong Kong dollars ($9.2 billion) worth of stocks changing hands on the main board on Friday, the lowest since July 7. Markets in Hong Kong will be closed on Monday and Tuesday for Christmas and Boxing Day.
In mainland China, the Shanghai Composite Index added 0.9% for the week, its first weekly advance in six weeks.
Chinese policymakers will take structural reforms forward by eliminating ineffective supply and fostering new growth drivers by promoting technological innovation, said a statement issued after the China Economic Work Conference on Wednesday, according to Xinhua.
The A-share markets are rising on the new directions after China’s top economic meeting emphasized on policies such as the supply-side reform, rural development, and environmental improvement,” said Sam Chi-yung, senior strategist of South China Financial Group. He said investors will look to policy changes in the future as “the movement of Chinese markets does not only depend on economic data.”
Global financial companies, such as London-headquartered HSBC Holdings and insurer AIA Group, added 1.8% and 3.2%, respectively, this week after U.S. borrowing costs rose to multimonth highs amid optimism over tax reform. Pork producer WH Group climbed 5.5% this week amid bets its U.S. unit Smithfield Foods will benefit from lower tax rates.
This week the U.S. Congress approved legislation to cut corporate tax rates in the world’s largest economy to 21% from 35%. U.S. President Donald Trump will now sign the bill into law, making it his first major legislative win since assuming office in January. The Nikkei Asia300 Index added 1.4% this week as indexes on Wall Street rose to record highs on Monday.
Rig builder Honghua Group rose 1.5% on Friday in Hong Kong after saying it plans to sell two units of land drilling rigs to Arabian Drilling Company for $39 million.
Aircraft operating leasing company BOC Aviation edged 0.1% higher after saying on Friday it agreed to sell two Boeing 777-300ER planes. The aircraft have an aggregate current market appraised value of $251 million.
