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  • News Desk
  • Feb 22nd, 2005
  • Comments Off on Hong Kong stocks end modestly firmer, eyes on auction
Hong Kong blue chip stocks finished a shade firmer on Monday, consolidating strong gains made last week as investors await a land auction and earnings results from firms such as global fashion retailer Esprit due later in the week. Trading activity was further sapped by a public holiday in the United States. Wall Street will remain shut on Monday for the Presidents Day holiday and reopen on Tuesday.

The benchmark Hang Seng index edged 0.17 percent, or 23.78 points, higher to 14,111.65, following last week's 1.75 percent jump to seven-week highs.

Turnover at HK $14.1 billion ($1.8 billion) was well below Friday's HK $17.2 billion.

"The market is directionless with the US closed for a holiday tonight. It is also awaiting the land auction tomorrow, so it's stuck in a tight range," said Louis Wong, research director at Phillip Securities.

Property shares matched gains in the wider market ahead of the city's first commercial land auction in more than three years on Tuesday, which is expected to attract fierce competition among developers.

The Hang Seng Properties sub-index, which groups large blue chip developers such as Sun Hung Kai Properties and Cheung Kong (Holdings) Ltd, rose 0.20 percent to 17,359.26.

Mid-tier developer Kerry Properties Ltd put on 4.7 percent to HK $18.95, benefiting from owning real estate near the location of the land to be auctioned, traders said.

But New World China Land Ltd fell 14.38 percent to HK $3.425 after the company said it plans to sell at least HK $6.3 billion (US $807 million) in rights shares to reduce debt and fund property projects.

"It's three for two, so a big dilution and also a deep discount to the last traded price before the suspension, so it has been sold off today," Phillip Securities' Wong said.

Elsewhere, shares in Moulin International Holdings Ltd were suspended from trading after the eyewear maker and retailer raised US $81.3 million through placement of shares and convertible bonds, according to term sheets seen by Reuters.

The firm's shares last traded at HK $6.40.

Esprit Holdings climbed 1.95 percent to HK $47 ahead of its results on Wednesday. The global fashion retailer is expected to post a strong 43 percent jump in first-half profit, buoyed by strong sales in Europe, improving Asia operations and gains in the euro.

Among smaller counters, three new media companies that do business in China surged after China's top online game operator, Shanda Interactive Entertainment Ltd, bought a 19.5 percent stake in wireless media firm Sina Corp.

Tencent Holdings Ltd, a provider of mobile messaging services, gained 8.63 percent to HK $5.35, Tom Online, a similar company, added 8.94 percent to HK $1.34, while Hongkong.com, which operates an Internet portal, shot up 7.84 percent to HK $0.55.

After the market closed, official data showed the city's unemployment rate dipped to a fresh three-year low of 6.4 percent, beating expectations for a steady 6.5 percent rate.

Copyright Reuters, 2005


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