Hong Kong shares ended higher Friday boosted by strong gains of Hong Kong Exchanges on a recent increase in market turnover, and of Chalco on a cut in output in the aluminum sector.
The blue-chip Hang Seng Index rose by 362.77 points, or 1.7 percent, to 22,184.55, the first time it had risen above the 22,000-point level since June 30. The index closed the week up 3.6percent.
Turnover totaled 70.02 billion HK dollars, down from 74.18 billion HK dollars Thursday, but off a low of 37.9 billion HK dollars on June 25.
ICEA Securities Asia strategist Ernie Hon said the index could head toward 23,000 as investors are getting back to the market.
Hon said that it was probably due to the expectation of the central government's intention to create a good atmosphere ahead of the Olympic Games.
An investment manager at Tanrich Securities Jackson Wong, however, warned that the current rise is only a technical rebound, saying that current gains may not last for long if there are no positive leads.
As trading volume recovered, Hong Kong Exchanges, which operates the local bourse, rose 5.6 percent to 112.50 HK dollars. However, according to a recent research report by Morgan Stanley, the bourse operator could still face heavy downward pressure, given the apparent lack of confidence in the markets, velocity and,hence, turnover could fall further.
Chalco, China's largest alumina producer by output, rose 6.2 percent to 9.36 HK dollars on news that 20 major Chinese aluminum smelters, including Chalco, will cut aluminum output by 5 percent to 10 percent.
Chinese financials continued to rally, with China Construction Bank being the latest in a slew of mainland lenders to disclose expectations of robust first-half earnings.
In a statement to both the Shanghai and Hong Kong stock exchanges, CCB, one of China's four largest banks by assets, said it expects net profit for the six months ending June 30 to have risen more than 50 percent over the 34.22 billion RMB recorded for the same period last year.
CCB rose 2.2 percent to 6.50 HK dollars. Peer ICBC was 2 percent higher at 5.57 HK dollars and China Merchants Bank was up 2 percent at 26.85 HK dollars after making similarly rosy forecasts for first-half earnings.
But Sun Hung Kai Financial said it remained cautious about Chinese banks' second-half outlook on China's 15 percent cap on lenders' loan growth and rising credit costs as funds shift to higher-yielding longer-term deposits.
Source: Xinhua
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