Hong Kong Stocks to Rally on U.S. Rescue Plan, CLSA's Wood Says

By Hanny Wan

Sept. 22 (Bloomberg) -- Hong Kong stocks will likely rally should the U.S. Treasury win approval for its $700 billion plan to clean up bank balance sheets, CLSA Ltd.'s Christopher Wood said.

China's yuan-denominated A shares will benefit from more market-friendly government policies, Wood, the top-ranked Asian strategist in Institutional Investor's annual poll said at an investor conference organized by his firm in Hong Kong today. He recommends buying China Life Insurance Co. and China Overseas Land & Investment Ltd.

Since the start of 2007, global financial companies have reported more than $510 billion in credit losses and writedowns linked to the slump in the U.S. housing market and slowing economic growth.

The credit crisis last week caused Lehman Brothers Holdings Inc. to file for bankruptcy and the U.S. government to take over American International Group Inc. Merrill Lynch & Co. was forced to sell itself to Bank of America Corp.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net