Hong Kong stocks accelerated further into record territory on Friday, with mainland insurers striking new highs, as investors wagered China would lift their allotment quota for investing in overseas securities.
Units in RREEF China Commercial Trust languished in their debut, dropping as much as 10 percent below their offer price. The market seesawed in and out of positive territory as the recent strong gains prompted profit-taking.
But buyers rushed in near the end of the session to push the benchmark Hang Seng Index up 0.2 percent, or 45.24 points, to end at 21,999.91, its fifth straight record close. It set its fourth consecutive life high at 22,052.85. The index gained 4.7 percent for the week.
The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, managed its sixth straight peak at 12,309.99, before easing slightly to end up 0.3 percent, or 31.74 points, at 12,239.71. It gained 7 percent for the week, its biggest since the end of last year.
Mainboard turnover was the fourth largest ever HK$95.8 billion (US $12.3 billion), just trailing Thursday's HK$95.9 billion. The market should march higher in the week ahead, buoyed by confidence and optimism amid China's recent move to set rules allowing more financial institutions to invest in overseas securities, analysts and brokers say.
"What matters right now is sentiment," said Linus Yip, strategist at First Shanghai Securities. But some say the market is so bullish it is willing to overlook fundamentals. "People are optimistic - 22,000 is a bit pricey, but momentum is too strong," said Peter Pak, vice president at BOCI Securities.
China Life shares, the day's most active, gained 1.6 percent to HK$28.95, having earlier set a new peak at HK$29.25. Ping An Insurance, the biggest boost to the H shares, reached a life high of HK$57.95 before settling up 6 percent at HK$57.25.
PICC Property and Casualty Co Ltd rose 0.8 percent to HK$6.52, off a life high of HK$6.80 set in earlier trade. Investors booked profits in oil producers after their stellar run, with PetroChina Co Ltd falling 1.5 percent to HK$11.72. CNOOC Ltd declined 1.8 percent to HK$8.96.
Investors also cashed in Hong Kong Exchanges and Clearing after its record run. HKEx ended the day down 1.2 percent at HK$108.90, though it Merrill Lynch to downgrade the sports shoe maker to sell from neutral.
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