Hong Kong stocks advanced on Monday, with the Hang Seng Index (HSI) climbing for a fifth day, as Li & Fung Ltd rebounded from a plunge last week and as oil producer Cnooc Ltd climbed after a report it sold part of a license.

Li & Fung rose 3.8 percent after dropping as much as 7.3 percent on May 27. Cnooc increased as much as 1.5 percent after selling a 25 percent stake in a license to explore for hydrocarbons in Qatar to France's Total SA.

The HSI climbed 0.29 percent to 23184.32 at the close, after falling as much as 0.1 percent. Five stocks advanced for every three that fell on the 45-member gauge. The Hang Seng China Enterprises Index rose 0.34 percent to 13004.31.

Li & Fung jumped 3.8 percent to HK$16.82. The stock tumbled 7.4 percent in the previous two trading days after UBS AG cut its target price to HK$9 from HK$16.50 and lowered its earnings estimates.

Cnooc rose as much as 1.5 percent to HK$19.34. The company, which secured rights to the offshore concession two years ago, will retain a 75 percent stake and operate the area called Block BC, according to an e-mailed statement Sunday.

Giordano International soared 7.5 percent to HK$7.17 its highest-ever close.

The HSI has risen 0.4 percent this year through May 27 as growth in corporate profits eased concern Japan's earthquake and nuclear accident and Europe's debt crisis will slow global economic growth. Shares in the gauge traded at an average 12.4 times forecast earnings on May 27, compared with 14.4 times at the end of last year, according to data compiled by Bloomberg.

China Shenhua Energy Co, China's largest coal producer, gained 0.7 percent to HK$37.45 after its board of directors approved plans to buy back as much as 10 percent of A-shares and 10 percent of H-shares depending on market conditions.

CSR Corp, China's largest-listed trainmaker, gained 1.8 percent to HK$7.78 after saying it won contracts worth a combined 3.94 billion yuan ($608 million).

Futures on the HSI increased 0.3 percent to 23198. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, rose 3.3 percent to 18.32, indicating options traders expect a swing of 5.3 percent in the HSI in the next 30 days.

Bloomberg

(HK Edition 05/31/2011 page3)