* HSI +0.1 pct, H-shares +0.4 pct, China shut
* China property strong, Shimao post strong 2012 sales
* China autos strong as Korean rivals fall
* Huaneng Power toppled from 5-year high
By Clement Tan
HONG KONG, Jan 3 Hong Kong shares crept to
another 19-month high, with last year's growth-sensitive
laggards leading gains on Thursday after further positive China
data affirmed the recovery trend in the world's second-largest
Country Garden and Kaisa Group led gains
among Chinese property stocks after getting a solid response on
Thursday when they became the first two companies to tap the
credit market in Asia this year.
The Hang Seng Index went into the midday trading
break up 0.1 percent at 23,338 points, its highest intra-day
level since June 1, 2011. The China Enterprises Index of
the top Chinese listings in Hong Kong rose 0.4 percent.
The HSCE's 4 percent jump on Wednesday - its biggest daily
gain in a year - took it to the highest point since August 2011.
Its relative strength reading suggests the index is now at its
most overbought levels since October 2010.
Mainland Chinese markets remained shut on Thursday and will
kick off the new year on Friday.
"Strength in the Chinese property and insurance sectors is
underpinned by solid investment themes," said Alex Wong,
director of asset management at Ample Finance Group.
"There's some rotational buying going on after the big jump
yesterday, as well as some more chasing of 2012 laggards," added
Wong, who said he bought shares of Asia insurance giant AIA
Group on weakness on Thursday.
Shares of Country Garden, which have risen in each of the
last seven sessions, jumped 5.1 percent on Thursday after it
announced it is conducting an international offering of senior
notes with a 10-year maturity.
Shimao Properties also jumped 5.1 percent after it
reported a 50 percent jump in contracted sales in 2012 from the
previous year, suggesting that demand in the mainland remained
robust despite curbs on home purchases.
Citi analysts said in a note dated Jan. 2 they expect the
rapid increase in market transactions in the last quarter of
2012 will carry into this year, with smaller developers starting
to aggressively buy land in the second quarter.
Citi's top picks in the sector include counters that are
focused on tier 1 and 2 cities, have high sales-growth
sustainability and good execution ability. Among its picks are
Shimao, China Resources Land and Shenzhen-listed China
China Resources Land jumped 4.7 percent to a record high on
Thursday. It surged 69 percent in 2012, compared with the 23
percent jump for the Hang Seng Index.
The Chinese auto sector was also a key outperformer on the
day, with traders citing a mainland news report that Beijing
city government bought 5,000 new energy vehicles.
Geely Auto rose 2.4 percent, Brilliance China
gained 4.2 percent, while Baoxin Auto soared
The sector's broad strength contrasted with the slump in the
shares of Korean rivals as the rising won threatens to sap their
profits. Shares of Japanese peers did not trade as Tokyo's
market remained shut for the New Year holiday.
CHASING LAGGARD CYCLICALS
Chinese coal stocks, among the biggest laggards in 2012,
rose on Thursday on hopes of improving economic growth. In 2012,
these stocks were hurt by expectations of reduced demand as
China's economy slowed.
Growth in China's increasingly important services sector
accelerated in December at its fastest pace in four months,
adding to signs of a modest economic revival at year-end.
Yanzhou Coal, down 22.7 percent in 2012, rose 3.5
percent. China Coal Energy, up 0.5 percent in 2012,
climbed 2.3 percent.
The coal sector's strength came as Chinese power producers
saw the bigger percentage losses on the day. Huaneng Power
, which closed at a five-year high on Wednesday,
dropped 2.2 percent.
Coal counters have been on a steady climb since China, the
world's top coal importer, said late last year it would scrap a
regulation to cap spot thermal coal prices and would no longer
intervene in annual coal price negotiations between sellers and
utilities starting in 2013.