Hong Kong shares close near 16-month high, China gains too

Mon Dec 10, 2012 2:17pm IST

* HSI +0.4 pct, H-shares +0.7 pct

* CSI300, Shanghai Comp both +1.1 pct

* Trade data weak, ind production backs recovery hopes

* China property shares lead gains in Hong Kong

* CNOOC rises 1.1 pct after Canada approves Nexen deal

By Vikram Subhedar

HONG KONG, Dec 10 (Reuters) - Hong Kong shares rose on Monday, led by China-related stocks, as hopes of an economic revival encouraged investors to load up on mainland-related property, banking and resource businesses.

The Hang Seng index climbed 0.4 percent to 22,276.7, a shade below last Wednesday's close at the highest level since August 2011. The China Enterprises index rose 0.7 percent, outpacing gains in other Asian benchmarks.

In China, the CSI300 of top Shanghai and Shenzhen listings rose 1.1 percent to 2,271.05. The Shanghai Composite also closed up 1.1 percent, bringing its rebound from a near four-year low on Dec. 4 to 6.3 percent.

Data showing weaker-than-expected Chinese export growth last month took some shine off weekend numbers that pointed to a recovery in industrial production although it did little to dent optimism in the stock market.

"At this point, bad data is not as much of a surprise for the market as good data is," said Christian Keilland, head of trading at BTIG in Hong Kong.

"Investors in China, who have had two really miserable years, seem to be responding to change," said Keilland alluding to comments from China's new Communist Party chief, Xi Jinping, on fighting corruption and pushing reform.

Chinese property shares led gains on the day as investors continued to buy into one of this year's strongest performing sectors in Hong Kong.

China Resources Land rose 2.1 percent and was the Hang Seng's second-best performer. Monday's climb brought its 2012 gains to 73 percent compared with 20.8 percent for the Hong Kong benchmark.

Mainland developer China Vanke, the biggest by sales, rose 1.5 percent and was among the top boosts on the CSI300 after banking stocks. Vanke shares are up 24.9 percent this year, far outperforming the CSI300's 3.2 percent decline.

Goldman Sachs has turned bullish on the prospects of Chinese real estate developers, arguing that a recovery in sales as well as prices will lead to better profitability and earnings growth.

Greentown China Holdings, Longfor Properties Co Ltd and Vanke are among Goldman's top picks in the sector.

Energy shares continued their recovery led by CNOOC as a major overhang in the form of regulatory approval for its $15.1 billion bid for Canada's Nexen was removed over the weekend.

CNOOC shares rose 1.1 percent. The China oil major's shares have recovered from the slump in August following its bid and are currently at their highest level since May.

Analysts at HSBC, who have an "overweight" rating on CNOOC shares, expect the Nexen deal to add about 8 percent to profit and 20 percent to production for the Chinese company in 2013.