Hong Kong stocks hit fresh 1-year high on rush of Chinese money
Sept 2 (Reuters) - Hong Kong stocks advanced to a fresh one-year closing high on Friday led by a burst of Chinese money into the city's blue-chips at the fastest pace in nearly 1-1/2-years.
The benchmark Hang Seng index climbed 0.5 percent to 23,266.70 points, the highest close since last August, and brings the weekly gain to 1.6 percent. The China Enterprises Index gained 0.8 percent.
Chinese investors stepped up buying blue-chips such as HSBC and Bank of China under the Shanghai-Hong Kong Stock Connect, with weekly money inflows under the cross-border scheme surging to 17.7 billion yuan ($2.65 billion), the highest level since last April.
The south-bound gush under the Shanghai Connect comes as mainland investors seek to front-run a similar cross-border link between Shenzhen and Hong Kong, expected to start in November.
Chinese investors are also eagerly seeking bargains for foreign-currency assets amid the backdrop of a low-yield environment and a slowing economy at home.
"Hong Kong stocks are still modestly valued. U.S. stocks look quite expensive, and Chinese stocks are not cheap," said Charles Wang, Chairman of Shenzhen-based Appleridge Capital Management Co.
"There has been strong Chinese demand for overseas asset allocation, so Chinese money inflows into Hong Kong are sustainable."
Chinese interest in Hong Kong stocks spiked after the official Xinhua News Agency reported on Tuesday the Shenzhen-Hong Kong Connect is expected to be launched in mid- or late November, earlier than many had expected.
On Wednesday, Chinese investors spent 4.3 billion yuan buying Hong Kong stocks under the Shanghai-Hong Kong Connect, the most since June 24, and was followed by a similar amount on Thursday and Friday. Continuación...