Hong Kong Market gains 0.56%

Headline indices of the Hong Kong share market closed higher on Tuesday, 21 August 2018, as risk appetite buying continued on tracking positive lead from Wall Street overnight and gain in Mainland A-share market on optimism Beijing to further relax its policies to counter the impact of Sino-U.S. trade frictions. At closing bell, the Hang Seng Index advanced 154.77 points or 0.56% to 27,752.79. The Hang Seng China Enterprises Index added 105.27 points or 0.99% to 10,737.63. The sub-index of the Hang Seng tracking the Commerce & Industry sector inclined 0.96%, the financial sector was 0.44% up, and properties sector rose 0.89%, while Utilities sector fell 1.65%. Turnover increased to HK$100.3 billion from HK$93.7 billion on Monday.

China is likely to cut banks' risk weighting for local government bonds from 20 percent to zero in the near term to attract funding for the bonds, the state-run China Securities Journal reported on Tuesday. The move, if confirmed, would make it easier for local governments to raise money for infrastructure investment.

Market participants are awaiting developments in the US-China trade conflict after the two countries said on Thursday, 16 August 2018, that they would hold lower-level trade talks next week. As per reports, the talks in Washington would take place on August 21 and 22, just before $16 billion in new US tariffs on Chinese goods take effect, along with an equal amount of retaliatory tariffs from Beijing. The US Trade Representative's office said on Friday it doubled the length of tariff hearings on the next $200 billion worth of Chinese goods to six days from the previously planned three due to overwhelming demand from companies to testify. The hearings will be held Aug. 20-24 and on Aug. 27.

Handset components makers rose across the board. Sunny Optical (02382) soared 8.8% to HK$94.7 after the company said it spent HK$12.58 million buying back its own shares yesterday. AAC Technologies (02018) shot up 8.6% to HK$87.2 ahead of its earnings report tomorrow.

Country Garden (02007), China Resources Land (01109) and Longfor Group (00960) announced their earnings results during lunch break. The stocks surged 7.9%, 4.4% and 5.2% to HK$12.24, HK$28.55, and HK$21.25 respectively.

Among individual stocks, Yadea Group (01585) net profit rose 13.5% year-on-year to RMB194.8 million on the back of 41% gain in total revenue to RMB4,583 million for the six months ended June 2018. Gross profit grew 44.8% year-on-year to RMB715 million. Gross profit margin slightly increased by 0.4% from 15.2% to 15.6%.

BOCOM International (03329) net profit rose 109% year-on-year to HK$232 million on the back of 54% gain in total revenue to HK$695 million for the six months ended June 2018.

China Vanke (02202) net profit rose 25% year-on-year to RMB9,124 million on the back of 55% jump in total revenue to RMB104,859 million for the six months ended June 2018. Gross profit grew 72% year-on-year to RMB35,371 million. During the reporting period, the group's booked gross profit margin of property development business was 27.8%, representing an increase of 2.1%age points when compared with that of the same period of 2017

OFFSHORE MARKET NEWS, US stock market closed higher for a third session on Monday, as a pair of billion-dollar deals reaffirmed confidence that the U.S. economy continues its steady expansion. Optimism that progress would be made toward resolving contentious trade disputes between the U.S. and China also bolstered sentiment. The Dow Jones Industrial Average advanced 89.37 points or 0.35% to 25,758.69, the Nasdaq gained 4.68 points or 0.06% to 7,821.01 and the S&P 500 picked up 6.92 points or 0.24% to end at 2,857.05.

The major European markets ended firmly in positive territory on Monday. The DAX of Germany climbed 0.99%, the CAC of France rose 0.65% and the FTSE 100 of the U.K. gained 0.43%.

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