Hang Seng sweeps back above 20,000
Telecoms spin-off Citic 1616 surges 67pc in strongest debut this year
The Hong Kong stock market surged back above the 20,000-point level yesterday, recouping most of its losses since late February, as big corporate takeovers in the United States eased investor concern about slowing growth in that country.
Citic 1616 Holdings, a telecommunications unit spun off from Hong Kong-listed Citic Pacific, surged as much as 75.97 per cent on its trading debut before closing 67.05 per cent higher than its offer price, making its listing the best among the 14 so far this year.
'Market worries over a possible US economic slowdown is easing as the takeover news [in the US] suggests that the market is awash with liquidity,' said Auyeung Tat, a fund manager at Apex Capital Management. 'Helped by ample liquidity in the market, Hong Kong stocks could gain further with their better fundamentals' than US stocks.
The Hang Seng Index rose 193 points or 0.97 per cent to close at 20,002.7. It is the highest finish since February 27, when the index slipped 1.76 per cent to 20,147.87 points, triggered by the sharpest one-day fall of mainland stocks in a decade.
The H-share index set a five-week high yesterday by gaining 0.84 per cent to 9,724.27 points.
China Mobile rose 0.93 per cent to HK$70.90 and HSBC Holdings edged up 0.44 per cent to HK$136.90, jointly contributing 23.83 per cent of the blue-chip index's gain.
Property stocks extended Monday's rally as investors bet on a resilient market after a 65 per cent increase in primary home sales last weekend from a week earlier.
The Dow Jones Industrial Average rose 0.23 per cent on Monday as more than US$44 billion in takeovers announced in the US allayed investor fears about the country's sub-prime mortgage crisis and easing of manufacturing growth.
Lifted by the gains in the US market, Asian stocks advanced. Japan's Nikkei-225 Index added 1.27 per cent and Singapore's Straits Times Index surged 1.3 per cent.
Mainland shares set records, with the Shanghai A-Share Index gaining 1.19 per cent and the Shenzhen A-Share Index rising 1.33 per cent.
Hong Kong stocks would trade in a narrow range before the Easter holiday amid shrinking turnover, KGI (Asia) associate director Ben Kwong Man-bun said. Turnover yesterday dropped to HK$40.01 billion from Monday's HK$42.39 billion.
Citic 1616 rose as high as HK$4.54 in the morning from its HK$2.58 offer price before falling back to close at HK$4.31. The firm raised HK$2.1 billion after pricing its shares at the high end of the indicative range.
Citic Pacific could reap a HK$1.8 billion exceptional gain from selling part of its Citic 1616 stake, managing director Henry Fan Hung-ling said.
Raging bulls
HSI at 5-week high amid buoyant home sales and mainland surge to record
Citic 1616 shares' gain over their IPO price on their trading debut yesterday: 67%
