Update | Retailers and insurers reignite Hong Kong stocks ahead of MSCI decision

Hong Kong and mainland shares advanced on Monday amid anticipation that index complier MSCI will include yuan-traded stocks in its global benchmarks this week.

While any positive decision by MSCI, due on Tuesday evening in New York, is expected to be seen only as “symbolic”, it is unlikely to result in sharp, immediate capital inflows into the mainland stock markets given their expected small weightings, analysts said.

The global index complier previously rejected the inclusion of mainland shares during reviews held in each of the past three years. Morgan Stanley said this year’s chance is more than 50 per cent while Goldman Sachs said the odds are 60 per cent in favour.

The Hang Seng Index advanced 1.2 per cent, or 298.06 points, to 25,924.55, paring losses of 1.6 per cent last week triggered by a rout in US technology stocks. The Hang Seng China Enterprises Index gained 1.3 per cent, or 135.91 points, to 10,520.80.

Insurers led gains, with China’s Ping An Insurance jumping 4 per cent to HK$52.15 after it said the 5-month premium income of its subsidiaries were up 33.8 per cent to 297.6 billion yuan (US$43.66 billion) and was included by Credit Suisse as one of the top picks for Chinese insurers. PICC Property and Casualty rose 2 per cent to 13 yuan.

Dah Sing Financial climbed 5.1 per cent to HK$63.7 while Dah Sing Banking rose 3 per cent to HK$16.7 after the group said that the sale of Dah Sing Insurance and Dah Sing Life Assurance to Tahoe Investment, formerly known as Fujian Thai Hot Investment, has been completed. Last year, the group said it would sell its life insurance operations in Hong Kong and Macau for HK$10.6 billion to the Fujian investment company, subject to regulatory approval and shareholders’ agreement. The share sale of the Macau Life Insurance Company however remains outstanding, Dah Sing said in an exchange filing on Monday.