Hong Kong Stocks Rally to Two-Week High; Cnooc, PCCW Surge

By Hanny Wan

Nov. 5 (Bloomberg) -- Hong Kong stocks rose, lifting the benchmark index to the highest in more than two weeks, as crude oil prices jumped yesterday and on speculation Barack Obama, the newly elected president of the United States, will take steps to boost the world's largest economy.

Cnooc Ltd., China's biggest offshore oil producer, surged 7.5 percent. Li & Fung Ltd., the largest Asian supplier of toys and clothing to Wal-Mart Stores Inc., jumped 6.9 percent.

PCCW Ltd. soared 29 percent after saying Chairman Richard Li and China Network Communications Group Corp. offered to take Hong Kong's biggest phone carrier private for as much as HK$14.9 billion ($1.9 billion).

As the U.S. presidential election results unfold, ``it means one uncertainty is being removed,'' said Renault Kam, a senior portfolio manager at Atlantis Investment Management in Hong Kong, which oversees $5 billion. ``The new president will work toward stabilizing the economy. The situation should improve.''

The Hang Seng Index climbed 812.53, or 5.7 percent, to 15,196.87 at the 12:30 p.m. break, adding to a two-day, 3 percent advance, and set for its highest close since Oct. 20. The Hang Seng China Enterprises Index, which tracks so-called H shares of Chinese companies, climbed 9.3 percent to 7,499.59.

The Hang Seng Index has jumped 38 percent since Oct. 27, its worst close since May 2004, after China cut interest rates for the third time in two months and Hong Kong followed the U.S. rate reduction last week.

Gauge Down

The gauge is still down 45 percent this year as global financial turmoil prompted Hong Kong to guarantee bank deposits last month and to form a task force led by the city's Chief Executive Donald Tsang aimed at alleviating the impact of the credit crisis.

Kam said investors can consider domestic-related stocks, though he would stay away from exporters.

Shares also advanced after the Hong Kong Monetary Authority added HK$814 million to the banking system last night. The action follows a HK$853 million injection yesterday and another HK$2.813 billion on Oct. 31.

BOC Hong Kong (Holdings) Ltd., the city's largest publicly traded bank by assets, soared 13 percent to HK$9.34. Bank of East Asia Ltd., a Hong Kong-based bank, surged 11 percent to HK$17.74.

Cnooc climbed 7.5 percent to HK$6.72, headed for its highest close since Oct. 15. PetroChina Co., Asia's biggest oil producer, advanced 7.8 percent to HK$6.25.

Oil Rises

Crude oil futures jumped 10 percent to $70.53 a barrel in New York yesterday, the biggest one-day gain since Sept. 22. The contract was recently at $68.91 in after-hours trading.

Li & Fung rose 6.9 percent to HK$16.96. Foxconn International Holdings Ltd., the world's biggest contract maker of mobile phones, advanced 6.4 percent to HK$2.98.

The Standard & Poor's 500 Index climbed 4.1 percent yesterday, the biggest presidential election day rally in 24 years. Obama crossed the requisite threshold of 270 electoral votes to defeat Republican rival John McCain, when television networks projected him winning the state of California.

PCCW soared 29 percent to HK$3.75, the sharpest among the 201 members on the Hang Seng Composite Index. The stock resumed trading today after being suspended Oct. 14.

Richard Li's Pacific Century Regional Developments Ltd. and China Network Communications, PCCW's second-biggest shareholder, are offering HK$4.20 in cash for each of the 3.55 billion shares, or a 52 percent stake, that they and parties acting with them don't already own, according to a statement yesterday.

All but four stocks on the 42-member Hang Seng Index advanced. November futures climbed 5 percent to 15,116.

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