Hong Kong Stocks Climb for Third Day; Developers Lead Advance
By Hanny Wan
Feb. 28 (Bloomberg) — Hong Kong stocks rose for a third
day, led by real-estate companies, as comments from the U.S.
Federal Reserves chairman fueled speculation the central bank
will cut interest rates.
Sun Hung Kai Properties Ltd. and New World Development Co.
climbed to two-week highs on expectations demand for real estate
can be sustained. Hong Kongs interest rates typically move in
step with those in the U.S. because the citys currency is
linked to the dollar.
“The prospect of lower interest rates is good for
developers, said Pauline Dan, who helps manage $2.5 billion at
Manulife Asset Management in Hong Kong. She favors shares of
companies with earnings derived from China.
The Hang Seng Index added 107.85, or 0.4 percent, to
24,591.69, taking its three-day gain to 5.7 percent. A gauge of
property stocks advanced the most among the Hang Sengs four
industry groups. The Hang Seng China Enterprises Index, which
tracks the Hong Kong-listed shares of Chinese companies, rose
0.7 percent to 14,039.98.
Shares also advanced on speculation more money will enter
Hong Kongs stock market after the manager of Chinas $200
billion sovereign wealth fund said it will give investment
mandates to hedge and private equity funds. China Petroleum %26amp;
Chemical Corp. rose to its highest in more than a week.
The Hang Seng Property Index advanced 1.4 percent. The
gauge has been the best performer in the past six months as six
interest-rate cuts at the citys biggest banks since September
raised expectations for higher real-estate demand. The value of
new mortgages approved last month rose to the highest since July
1997, according to figures from the Hong Kong Monetary Authority.
Lower Rates?
Sun Hung Kai, Hong Kongs No. 1 developer by market value,
climbed HK$3.20, or 2.3 percent, to HK$142. New World, the Hong
Kong developer controlled by billionaire Cheng Yu-tung, rose 40
cents, or 1.9 percent, to HK$21.65. Both stocks closed at their
highest since Feb. 14.
Kerry Properties Ltd., a Hong Kong-based developer
controlled by Malaysian billionaire Robert Kuok, added HK$1.85,
or 3.6 percent, to HK$53.40, the highest since Feb. 5. Wharf
(Holdings) Ltd., a unit of Hong Kong developer Wheelock %26amp;
Co., climbed HK$1, or 2.5 percent, to HK$41.75.
Fed Chairman Ben S. Bernanke signaled the U.S. central bank
is prepared to lower interest rates again even as inflation
accelerates. The Fed “will be carefully evaluating incoming
information bearing on the economic outlook and will act in a
timely manner as needed to support growth and to provide
adequate insurance against downside risks, Bernanke said.
`Hot Money
Interest rate futures show traders forecast an 86 percent
chance the Fed will lower its benchmark lending rate by 0.5
percentage point at a March 18 policy meeting. The rest of the
bets are for a 0.75 point reduction to 2.25 percent.
China Petroleum, the nations largest oil refiner, rose 26
cents, or 3 percent, to HK$9.02, its highest close since Feb. 19.
Li Ning Co., the Chinese sportswear maker endorsed by U.S.
basketball star Shaquille ONeal, advanced HK$1.40, or 5.8
percent, to HK$25.40, the highest since Jan. 25. The stock had
the biggest percentage gain of the 201-member Hang Seng
Composite Index.
China Investment Corp., which manages the nations
sovereign wealth fund, is seeking global fund houses to help
manage its overseas investments and will give out investment
mandates in the “next few months, said Gao Xiqing, president
and chief investment officer of the company.
“Mainland fund flows serve as a positive catalyst for Hong
Kong, said Castor Pang, strategist at Hong Kong-based Sun Hung
Kai Financial Co. “With this hot money coming in, Hong Kong
stocks will benefit in the short term.
Twenty-seven stocks on the 43-member Hang Seng Index
advanced while 16 dropped. February futures, which expired today,
added 0.6 percent to 24,551. The more-active March futures
climbed 0.8 percent to 24,510.
The following stocks rose or fell. Stock symbols are in
brackets after company names.
ASM Pacific Technology Ltd. (522 HK) gained HK$1.75, or 3.3
percent, to HK$54.85, its highest close since Jan. 4. The
worlds largest maker of semiconductor-packaging machines posted
record full-year profit on rising sales of gear for chips used
in consumer electronics products including mobile phones. Net
income climbed 10 percent to HK$1.27 billion ($163 million) from
a year earlier, the company said.
Hua Lien International (Holding) Co. (969 HK) lost 13 cents,
or 13 percent, to 90 Hong Kong cents, after climbing 13 percent
earlier. Trading resumed today after a one-day suspension. The
Chinese leather-maker agreed to buy three African sugar growers
for HK$1.28 billion because of surging demand for the commodity.
To contact the reporter on this story:
Hanny Wan in Hong Kong at
