• Thu
  • Sep 18, 2014
  • Updated: 1:44am

Lunar New Year rally comes early amid rush for telecoms, tech stocks

PUBLISHED : Saturday, 20 January, 2001, 12:00am
UPDATED : Saturday, 20 January, 2001, 12:00am

Telecommunications and technology counters were loaded into portfolios yesterday as investors, inspired by the Nasdaq Stock Market, went on a pre-holiday shopping spree.


The Hang Seng Index rose 404.8 points, or 2.6 per cent, to close at 15,933.55 on a turnover of HK$14.72 billion.


'People were expecting a Lunar New Year rally but it looks like the market pre-empted that,' said Raymond Tsui Yick-ki, the head of institutional sales at Dao Heng Securities.


'The reason for the strength in the market is the performance of the Nasdaq and Dow. [US] blue chips have reported results in line with the market with no surprises on the downside.'


The Dow Jones Industrial Average rose 0.88 per cent on Thursday while the technology-heavy Nasdaq Composite Index surged 3.19 per cent.


Hong Kong investors may also have had one eye on Nasdaq futures which were trading yesterday up to 60 points on top of Thursday's gain, Mr Tsui said.


With fears abating for now that the rapidly slowing US economy was going to hand out widespread corporate black eyes, investors could now focus on the positive, Worldsec International director Carlton Poon said.


'The market was concerned on many fronts but as we approach the [Federal Reserve's] FOMC meeting, the market is moving along to look at an interest rate cut,' he said.


Some institutional players who were last year afraid to be in markets are now afraid to be out.


'What I'm hearing from a lot of clients is they don't want to miss out on any liquidity-driven rally because of the Fed cuts,' said Vijay Harjani, the vice-president of Asian technology sales at Credit Suisse First Boston.


Hutchison led the way on the telecommunications front, jumping 5.05 per cent to $104, while China Mobile rose 4.21 per cent to $49.40.


Telecommunications plays were helped by SmarTone's ability to push through a rise in its monthly tariffs and strong subscriber growth reported by China Unicom, said Rohit Sobti, an analyst at Salomon Smith Barney.


Fuelling the gains early in the year was 'some new money going to work', he said. However, he warned: 'I would rather err on the side of caution.'


Properties also rallied, with Henderson Land up 0.69 per cent at $43.30 and Sun Hung Kai Properties 4.34 per cent ahead at $84.


Investors needed to be selective if they were going to continue harping on the property and rate-cut theme, said Alan Hutcheson of Pacific Challenge Securities.


Henderson Land, a low-end developer, was already trading at a premium to its net asset value. With the price of mass residential property unlikely to rise much this year, the company's NAV could not gain either, capping the share price, Mr Hutcheson said. Better value was to be had in New World Development and Wharf.


Swire, which jumped 9.56 per cent to $57.25, was also an interesting long-term bet as the value of its portfolio of office buildings was likely to rise 20 per cent over the next two years.


Key Figures


Close: 15,933.55 (+ 404.8)


Turnover: $14.72 bln


Volume: 6.32 bln shares


Day's high: 15,964.93


Day's low: 15,682.35


Advanced: 424


Declined: 202


Unchanged: 433


January futures:15,931 (+ 397)


February futures: 15,995 (+ 400)


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