HSI breaches 13,000 as buyers shift focus
Money continued to flow into Hong Kong equities yesterday but H shares, which have led the way over the past few weeks, were sidestepped as investors switched into property stocks and pushed the Hang Seng Index above the 13,000-point level for the first time in 2? years.
Property counters have been lagging the rest of the market since a strong sector rally in September and early October. But data showing that home sales increased last year provided an excuse to switch back in, dealers said.
The government is also widely expected to restrict the amount of land on offer when it announces a resumption of land sales through an application list later this week.
'This means the supply will remain low for the next couple of years, which should allow property developers to regain their pricing power,' BNP Paribas Peregrine analyst Adrian Ngan said.
The property sub-index jumped 5.87 per cent yesterday, led by a 10.2 per cent rise in Henderson Land Development. Sun Hung Kai Properties gained 6.03 per cent and Cheung Kong (Holdings) added 5.17 per cent.
The Hang Seng Index rose 1.59 per cent to 13,005.33 points.
Mr Ngan said he would not rule out 'some form of correction' in property counters after the land-sale announcement, given the sizeable gains yesterday - especially since they were partly liquidity-driven, brought on by a desire to shift money from H shares which had reached very high levels.
'But over the medium term, I think property stocks will remain a focus for investors,' he said.
Turnover in the stock market jumped to $26.91 billion yesterday, the highest since February 2000 after adjusting for BOC Hong Kong's placement in December that sent trading volumes ballooning to more than $34 billion.
The H-share index gave a relatively modest performance in the wake of a 6.83 per cent gain on Friday and last year's 152.21 per cent rally, rising only 0.52 per cent.
