Hong Kong Stocks Advance on U.S. Retail Sales; Li & Fung Gains

By Jonathan Burgos

Sept. 16 (Bloomberg) -- Hong Kong stocks gained for the first time in three days after growth in U.S. retail sales and New York manufacturing beat economist estimates, fueling optimism the global recovery is on track.

Li & Fung Ltd., the biggest supplier of clothes and toys to Wal-Mart Stores Inc. and Target Corp., climbed 3.1 percent. HSBC Holdings Plc, which gets 24 percent of its revenue in North America, added 3.1 percent as Credit Suisse Group AG raised its share-price target. China Shenhua Energy Co., the nation’s largest coal producer, jumped 4.4 percent on speculation China’s demand for commodities has returned.

“The retail sales data show that the situation is not as bad in the U.S.,” said John Koh, who helps manage $1.1 billion at MEAG Hong Kong Ltd. “Most of the data we’ve seen are positive but unemployment remains a concern.”

The Hang Seng Index gained 2.6 percent to 21,402.92 at the close, snapping a two-day, 1.4 percent decline. The gauge has surged 89 percent from a four-month low on March 9 as stimulus measures revived economies around the world. Shares on the Hang Seng are priced at an average 17.3 times estimated earnings, up from 10.6 times at the start of the year.

The Hang Seng China Enterprises Index, which tracks so- called H shares of Chinese companies, rose 3 percent to 12,525.72.

Exporters Gain

Hong Kong exporters advanced after U.S. government data released yesterday showed retail sales excluding automobiles gained 1.1 percent last month, while the Federal Reserve Bank of New York said its general economic index rose to 18.9 in September. Both reports surpassed economists’ estimates.

Li & Fung, which gets 62 percent of sales from the U.S., climbed 3.1 percent to HK$28.30. Foxconn International Holdings Ltd., the world’s No. 1 contract maker of mobile phones, rose 1 percent to HK$5.23.

China Shenhua led commodity stocks higher, rising 4.4 percent to HK$35.30. Jiangxi Copper Co. Ltd., China’s biggest producer of the metal, advanced 3.4 percent to HK$18.80.

Commodity demand in China “is back on track in a very big way” and copper and coking coal have the best prospects for price gains as the world economy accelerates, according to CLSA Research Ltd.

Xinao Gas Holdings Ltd., the piped gas distributor partly owned by the World Bank, jumped 8 percent to HK$14.78. The company posted a 31 percent increase in profit to 374 million yuan ($55 million) in the first half from a year earlier on rising sales to households and industry.

Ho Family Stocks

Sun Hung Kai Properties Ltd., the world’s biggest developer by market value, gained 0.9 percent to HK$113. The company said full-year income excluding property revaluations rose 1.6 percent to HK$12.4 billion from a year earlier. That’s higher that the median HK$12 billion estimate of nine analysts surveyed by Bloomberg.

Shun Tak Holdings Ltd., the ferry company and property developer controlled by billionaire Stanley Ho and his family, advanced 8 percent to HK$6.72. The stock was maintained a “buy” at BNP Paribas, which raised its share-price estimate to HK$8.12 from HK$6.10.

SJM Holdings Ltd., the gaming company controlled by Ho, climbed 8.6 percent to HK$4.57, its highest close since its trading debut in July 2008, after the company said its share of the casino market in Macau rose.

That SJM managed to raise its market share even with the rival City of Dreams casino opening in June is a positive sign, Nomura International (HK) Ltd. said. With SJM opening two casinos this year and its Grand Lisboa adding more VIP tables, “we see further upside,” Nomura analysts Kenneth Fong and Benjamin Lo said in a report dated yesterday.

HSBC added 3.1 percent to HK$87.40. Credit Suisse Group raised its share-price estimate for Europe’s biggest bank to HK$92 from HK$90 and maintained its “outperform” rating.

To contact the reporter on this story: Jonathan Burgos in Singapore at jburgos4@bloomberg.net.