Home »Stocks and Bonds » World » Hong Kong stocks up

Hong Kong stocks rose for a third straight session on Wednesday, edging up 0.2 percent, as investors continued to scoop up recent laggards such as airline Cathay Pacific and container leasing firm COSCO Pacific.

Investors had shrugged off a widely anticipated 25 basis point US rate rise. But the market shut just before the city's largest lender, HSBC Holdings Plc., raised its prime interest rate by double that amount.

"The HSBC rate rise will hurt sentiment. Property will bear the brunt. When the prime rate goes up at that speed it indicates an urgency," said Alfred Chan chief dealer at Cheer Pearl Securities.

One analyst added that higher Hong Kong interest rates diminish the attractiveness of Hong Kong stocks with bank savings rates now at around 2.25 percent versus a roughly 4 percent yield for the Hang Seng Index.

"I think with interest rate rises the attractiveness of stocks diminishes, particularly the attraction of the upcoming real estate investment trusts," said Francis Lun, general manager at Fulbright Securities.

The world's largest real estate investment trust, the roughly US $3 bilion Link REIT, is due to list in late November after a long delay due to legal wranglings.

Hong Kong flagship carrier Cathay Pacific Airways was among the top blue chip performers after lagging most of the year on worries over fuel costs. Cathay rose 2.37 percent to HK$12.95.

COSCO Pacific, which fell 11.5 percent over the past month on worries about falling freight rates, rose 1.87 percent to HK$13.60.

The blue chip Hang Seng Index ended up 0.17 percent, or 25.22 points, at 14,597.48, its third straight day of gains after a steep drop in October.

Volume was below recent averages with HK$15 billion ($1.9 billion) worth of shares exchanged.

Property shares largely firmed after the US Federal Reserve raised interest rates by 25 basis points to their highest level in more than four years.

The rate increase had been widely expected and analysts said the supply of new apartments was still expected to fall short of demand in coming years.

The city's top developer Sun Hung Kai Properties Ltd rose 0.34 percent to HK$74.75.

China's top PC maker, Lenovo Group Ltd, recouped some of the heavy losses suffered on Tuesday after it reported better-than-expected first-half earnings but sent worrying signals about shrinking margins. Lenovo, the top blue chip performer so far this year, rose 1.4 percent to HK$3.57.

China's top oil refiner, Sinopec Corp, surged on expectations the government may introduce some new measures to help them counter shrinking margins due to high fuel costs. Sinopec rose 3.15 percent to HK$3.275.

Copyright Reuters, 2005


the author

Top
Close
Close