* HSI climbs 1.3 pct on day, rises 2.6 pct for week
* CSI300 up 0.4 pct for day, 2.6 pct on week
* China equity fund inflows highest this year: EPFR Global
* Galaxy Entertainment at record high on Oct gambling
By Clement Tan
HONG KONG, Nov 2 Hong Kong shares had their best
week in seven, with the Hang Seng Index hitting a 15-month high
as fund inflows buoyed hopes of more gains before year's end,
encouraging investors to build riskier positions.
Positive U.S. data helped, ahead of a non-farm payrolls
report later in the day that is expected to show U.S. companies
added workers in October at the fastest pace in eight months.
The Hang Seng Index rose 1.3 percent on Friday to
22,111.3, breaking above chart resistance at about 22,000 on its
way to its highest close since Aug. 2, 2011. It gained 2.6
percent this week, its best weekly showing since Sept. 10-14.
In the mainland, the CSI300 Index of the top
Shanghai and Shenzhen listings rose 0.4 percent on the day and
2.6 percent for the week. The Shanghai Composite Index
gained 0.6 percent on Friday and 2.5 percent this week. It was
the best week for Chinese markets since Sept. 24-28.
"We could see more gains from here because funds will need
to chase performance as the year draws to a close," said Alan
Lam, Julius Baer's Greater China equity analyst.
"Earnings were mostly in line and misses have not been too
major. With data pointing to the China economy stabilizing, we
may see more interest in Chinese equities after the 18th
Congress meeting next week," Lam added.
Lam said the laggard H-shares would lead further gains in
Hong Kong, noting the China Enterprises Index of the top
Chinese listings in Hong Kong, or the H-share index is up 9
percent in 2012, compared with the Hang Seng Index's 20 percent
Gains in Hong Kong on Friday came in the highest turnover
since Oct. 18. Daily average turnover has risen by about 20
percent since the start of September, spurred by improving China
A tranche of October data is expected late next week,
including inflation, urban investment, industrial output and
retail sales on Nov. 9, trade data on Nov. 10 and money supply
and loan growth data anytime between Nov. 10 and 15.
Citing data from EPFR Global, which tracks fund flows, Lam
said money coming into China equity funds rose for a
seventh-straight week and was the most in almost two years.
Bourse operator Hong Kong Exchange (HKEx) rose 2.3
percent to its highest since mid-April on hopes that increased
turnover will boost its bottomline.
The government of Hong Kong, a Chinese territory where most
foreign investors have their China investments given the
mainland's capital controls, said on Friday it had no plans to
change its currency peg against the U.S. dollar. It dismissed
talk that authorities are rethinking policy after being forced
into heavy sales of the Hong Kong dollar to curb its strength.
MACAU CASINOS, JEWELLERS STRONG
Top performers on the day included the Macau gaming sector
after gambling revenue there rose a better-than-expected 3.2
percent in October from a year earlier, buoyed by a week-long
holiday in China that enabled cash-rich mainland gamblers to bet
in the world's largest casino market.
Sands China soared 6.3 percent to the highest
since late April, while Galaxy Entertainment was up
7.6 percent to a record high since listing 21 years ago.
China-focused jeweller Chow Tai Fook surged 9.6
percent in heavy volume, leading a sector rally as investors bet
on a pick-up in luxury spending on hopes of favourable economic
policies from the coming party congress in Beijing.
At China's 18th National Congress meeting, which starts on
Nov. 8, a once-in-a-decade political transition will commence as
the Chinese Communist Party elects new leaders, alleviating some
political uncertainty for investors.
Positive Hong Kong September retail sales figure released
late on Thursday also helped.
Chinese railway, steel, construction and other
infrastructure-related shares gained as investors looked to add
risk. In Hong Kong, Angang Steel climbed 6.1 percent,
and China Railway Construction was up 5.9 percent.