Bargain-hunters and mortgage talk lifts index in light trading
GENTLE bargain-hunting and casual remarks by Hang Seng Bank chairman Sir Quo-wei Lee on mortgage lending were enough to spark a rise in share prices yesterday, lifting the Hang Seng Index 39.44 points.
On the futures exchange the Hang Seng Index contracts rose sharply in light trade, the February contract rising 117 to 5,782.
In a day of thin trade of $1.44 billion, Sir Quo-wei's remarks that ''we are studying a string of options [on mortgages] very carefully'' reversed a mild sell-off.
The sell-off was the result of pessimists outnumbering optimists after investors had digested reports of the weekend meetings in Guangzhou between Mr Lu Ping, director of the Hongkong and Macau Affairs office, and other advisers, officials and business people.
Among the stocks boosted by Sir Quo-wei's reported comments was SHK Properties, which added 2.9 per cent, 50 cents, to $27.80.
The best performance in the index was by Jardine Matheson, which bargain hunters bid up to $43.75, a rise of $1.25, 2.9 per cent.
However, many investors could find no reason to trade, with the public offer for Denway Investment, a mainland car company, taking the attention of many.
The mild sell-off lasted for the first 30 minutes of trade, with the index reaching a low of 5,706.61, more than 40 points below Friday's close. This enticed investors looking for bargains, and prices stabilised for an hour.
By 11.30 am, however, Sir Quo-wei's comments had awakened buying interest, and prices rose slowly but surely for the rest of the day.
By the lunch close the index had reached 5,754.28, and continued mild buying in the afternoon pulled it up further to the close of 5,786.65, the day's high.
The afternoon rise was most marked in property stocks and the property index rose 63.33 points during the afternoon to turn a 20.01 point fall in the morning to a 43.32 rise on the day.
Cheung Kong was initially hit by mild selling due to the aborted rights issue by Barclays de Zoete Wedd on Friday, but recovered to close unchanged at $20.20, after reaching $19.80.
China Light and Power had a good day after a press report, later down-played by the management, of negotiations in Shandong province. The shares rose 2.2 per cent, 75 cents, to $34.75.
The finance sub-index was the only one to drop, shedding 3.84 points to 5,564.79.
HSBC Holdings, which returned to its usual position as the stock with the biggest turnover - $121.6 million - was unchanged at $61.
On the futures exchange, trade was more active than in equities, with 5,941 contracts written. The longer contracts posted even bigger gains than February's, with the June contract rising 130 points to 5,780 on trade of 313 contracts.
The February contract's close put it just four points below the cash index.
Outside the Hang Seng Index, investors looking for the next shell company to be used as a mainland vehicle turned their attentions to Wah Ha Realty, Buildmore International and Singapore Hongkong Properties.
Wah Ha's statement during the lunch break that ''we are not aware of any reasons for such an increase'' seemed to have little effect, with the shares still closing up at $1.71, a rise of 42 cents.
Buildmore also released such a statement at the exchange's request, but still closed up 18.4 per cent at $1.22, a rise of 19 cents.
Tomei saw relatively heavy trade of $21.8 million and rose 6.8 per cent, 11 cents, to $1.73.