2014.03.2405:16:00UTC+00Hong Kong Stocks Spike Up on Profits After China PMI Data

Hong Kong stocks bolster on positive profits reports, with a measure of Chinese shares extending their bounced back after entering a bear market last week. Shares advanced even as data on mainland manufacturing didn't manage to hit projections.

The Hang Seng China Enterprises Index, also known as the H-share index, escalated 1.5 percent to 9,572.49 as of 10:13 a.m. in Hong Kong. The gauge has soared 4 percent since logging a 20 percent decline from a December topmost mark to enter a bear market on March 20. The Hang Seng Index soared 1.1 percent to 21,677.11. HSBC Holdings Plc and Markit Economics Ltd.’s preliminary Purchasing Managers' Index for March today slide lower to 48.1, missing economist assumptions of 48.7 and a final reading of 48.5 the previous month.

“As long as we can see what’s happening with the global economy, it’s not a surprise,” said Andrew Sullivan, director of sales trading at Kim Eng Securities in Hong Kong. The PMI data isn’t “ positive for the market, but I don’t think it’s a huge negative.”

Yanzhou Coal Mining Co. skyrocketed 6.9 percent, on tracked for the largest daily increase since September, after earnings surpassed projections and the shares were upgraded by Credit Suisse Group AG. Great Wall Motor Co. increased 4 percent after net income climbed from a year earlier. Citic Pacific Ltd. and PetroChina Co. led advances on the Hang Seng Index

The H-share index dive lower 13 percent this year through last week amid data that showed falling exports, weaker manufacturing and slower retail sales in China. The measure was valued at 1.1 times net assets, the largest discount since September 2003 to the MSCI All-Country World Index of developed and emerging shares, which had a ratio of 2.

Hutchison Declines

Hutchison Whampoa Ltd. sagged down 3.9 percent today. The firm controlled by Asia’s richest man Li Ka-shing said Temasek Holdings Pte will pay HK$44 billion ($5.7 billion) in cash for a 25 percent stake in its retail division A.S. Watson & Co. The firms, which will make a strategic alliance, plan to list the unit, Hutchison said on March 21 after the close. Hutchison will pay a special dividend of HK$7 per share, it said.

The Chinese economy may progress about 7 percent this year, China Securities Journal reported, citing Wang Jian, a researcher for the National Development & Reform Commission. The nation may face a overcapacity crisis next year and possible international financial turmoil can’t be ruled out, Wang said. The nation’s official 2014 expansion goal is 7.5 percent after skyrocketing 7.7 percent last year, the similar pace as in 2012.

Preferred Shares

Firms can issue preferred shares if they are included in the Shanghai Stock Exchange 50 A-Share Index, the China Securities Regulatory Commission said in a statement on its verified microblog account. Publicly exchanged firms can also issue the stock to pay for acquisitions and purchase back shares, the regulator said.

Of 125 firms in the Hang Seng Composite Index that reported yearly profits this month for which Bloomberg had projections, 54 percent surpassed earnings estimates. About 300 businesses on the gauge are scheduled to release results in March, according to data gathered by Bloomberg.

Futures on the Standard & Poor’s 500 Index inched up 0.2 percent after the gauge surrendered 0.3 percent on March 21.