By Hanny Wan and Chan Tien Hin
Oct. 29 (Bloomberg) -- Hong Kong's stocks rose, extending yesterday's 14 percent surge amid the most volatile trading in a decade, after China Shenhua Energy Co.'s profit growth raised expectations companies will withstand a global slowdown.
Shenhua Energy, the nation's biggest coal producer, jumped 12 percent after third-quarter earnings climbed 48 percent. Cnooc Ltd., China's biggest offshore oil and gas producer, jumped 11 percent after saying it will boost reserves and production as third-quarter sales rose 69 percent.
``China has the advantage of having a big market that will cushion Hong Kong, it will act as a buffer for corporate earnings,'' said Ang Kok Heng, who manages $156 million as chief investment officer at Phillip Capital Management in Kuala Lumpur. Still, it is an ``open market which makes it very volatile.''
The Hang Seng Index added 105.78, or 0.8 percent, to close at 12,702.07. A measure of the index's 10-day historical volatility rose to 126.8, the highest since the period to November 7, 1997. The gauge is still 30 percent lower this month, which would be its worst monthly drop since October 1987. The measure has slumped 54 percent this year, set for its worst annual performance since 1974.
The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, climbed 1.8 percent to 5,786.71.
To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net; Chan Tien Hin in Kuala Lumpur thchan@bloomberg.net
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