Land auction fires surge but turnover stays light

WEDNESDAY'S property auction and demand for HSBC Holdings sparked a broad-based rise on the stock market yesterday, with the Hang Seng Index moving up 67.21 points or 1.2 per cent.

The significance of the rise was reduced, dealers said, by the low turnover of $1.86 billion, indicating investors were still very cautious about the risks of further attacks from China over Governor Chris Patten's election proposals.

The caution persisted despite an apparent weakening of the Government's position on the 70 per cent mortgage ceiling.

World International, part of the consortium that paid a record $3.53 billion for a plot of Crown land in Diamond Hill, was in demand, although the best performing share in the index was Dairy Farm, bouncing back from a dismal week.

The rise was first felt in trading of Hongkong stocks in London overnight. When the local market opened it moved up sharply in response.

The opening quote of 5,723.45 was the day's low, and after 15 minutes of trading the index stood at 5,766.61, up 55.81 from Wednesday's close.

The rise soon started to run out of steam, however. After an hour of trading it touched 5,787.17, but buying pressure dried up and prices were little changed for the rest of the day, leaving this figure as the day's high.

Total volume of futures contracts was low at 4,129.

HSBC's rise of $1 to $61 appeared to be overseas institutions buying after recent price slips.

Turnover of $173.6 million was easily the day's highest, more than double the turnover of the second most active share, Cheung Kong.

Among property stocks, Hongkong Land had the best performance, rising 3.2 per cent to $12.90, a jump of 40 cents.

Next was Cheung Kong, which added 2.5 per cent to $20.30, a rise of 50 cents.

World International added 15 cents or 2.1 per cent to $7.30. But Wharf, another member of the consortium winning the Diamond Hill site, gained much less, up just 10 cents or 0.6 per cent to $17.20.

Another consortium member, Hongkong Realty and Trust, which is not a Hang Seng Index stock, added 10 cents to $10.10, up one per cent.

It was Dairy Farm that had the biggest gain in the index, rising 50 cents to $10.70, a rise of 4.9 per cent.

In the previous eight days it has under-performed the Hang Seng Index by 11 per cent.

The properties sub-index had the biggest rise, adding 139.7 or 1.6 per cent to close at 8,684.97.

Worst performer was utilities, up 50.31 or 0.7 per cent to 7,189.18.

Group Sense, which first traded last Thursday, rose 11.4 per cent to $2.05 on buying from Japanese institutions attracted by the company's technology and business profile.

Its turnover of $71.4 million was the day's fourth-highest.

Innovative International rose 8.2 per cent to $2.10, a jump of 18.5 cents on strong turnover of $26.5 million, with dealers differing on whether it was buying on fundamentals or speculative.

Direct sales in the company's shares totalling 4.5 million shares were recorded at prices between $1.92 and $1.99.