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SCMP Reporter

HONG KONG stocks may scale new heights when the market re-opens on Monday, furthering their record-breaking run.

    Gains on Wall Street overnight on Friday lifted Hong Kong stocks listed in London, with the Hang Seng London Reference Index adding 89.7 points to close the week at 12,308.1 points.

  Benign US September inflation data and a downward revision of August retail sales more than compensated for higher-than-forecast September sales figures.

  This pushed US T-bonds and shares ahead.

  Locally, the Hang Seng Index closed on Friday at 12,218.4 points, having climbed 312.89 points over the week. In doing so, it broke the previous record close of 12,201 set on January 4, 1994.

  Investor sentiments in Hong Kong had been boosted by US economic data from the previous Friday showing an unexpected fall in employment.

  This meant interest rates are now unlikely to rise in the US this year, taking the pressure off Hong Kong to raise rates as well.

  Last week, average daily turnover rose to $7.37 billion from the previous period's $6.59 billion.

  Vickers Ballas Securities research director Andrew Fernow said: 'The burst of activity indicates the market is well supported with strong sentiment driving it into higher territory.'   The news sparking the rally was the US Commerce Department's announcement the number of non-farm payrolls surprisingly fell by 40,000 in September, against an expected rise of 166,000.

  The news confirmed US interest rates are likely to remain stable at least until the end of the year, boosting Hong Kong, as its rates normally follow those of the US.

  The Hang Seng Index soared 227 points on Monday before falling 26 points the next day as it paused for breath.

  The dramatic breakthrough came on Wednesday afternoon, when after trading in a narrow range through most of the day, the index surged 140 points in the last hour to shatter the 12,200 barrier.

  Brokers said troubled signs elsewhere in the region helped Hong Kong advance as investors were switching their money to the territory's stock market.

  The Philippines, India, and Thailand all saw their markets under pressure during the week.

  Thai stocks suffered one of the worst days in history on Monday, with the SET Index tumbling 6 per cent on fears new laws would curb bank earnings.

  Nikko Securities institutional sales manager Kent Rossiter said: 'Investors are selling out of Thai stocks at below market value and buying into Hong Kong above market value.'   Among the 33 Hang Seng Index constituents, 28 advanced, and five lost value.

  The best-performed stock in the index was Hopewell, which surged 12.5 per cent over the week after the company again surprised the market, this time with positive news.

  Hopewell said on Thursday it had decided to unload a majority stake in its subsidiary Consolidated Electric Power Asia (Cepa) to Atlanta-based Southern Corporation.

  Cepa closed the week up 2.87 per cent.

  The biggest net loser among blue chips was Oriental Press Group which fell 3.57 per cent over the week, but the stock had surged 13.5 per cent the week before on speculation of price rises among the Chinese language press.

  Outside the index, recently listed Glorious Sun Enterprises was the centre of attention, as its strong surge since its September 18 debut continued.

  Shares in the casual wear retailer rose as much as 187 per cent in just three weeks, when it peaked on Monday, only to slide 22.8 per cent over the next two days on news the Securities and Futures Commission was examining trading of the shares.



Record-breaking run set to continue as US economic data lifts sentiment