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SCMP Reporter

Property stocks looked healthier yesterday, helping the Hang Seng Index to close moderately higher.

 The benchmark index put on 84.86 points to settle at 12,626.04.

 Turnover was stronger at $8.05 billion, compared with $6.88 billion on Friday.

 Delta Asia Securities research chief Ricky Tam said Wall Street's performance helped the Hong Kong market to rise.

 'Last Thursday a lot of people thought the US market had run out of steam. But the Dow Jones surprised everyone and closed up on Friday.'  Property stocks benefited the most as investor sentiment turned in their favour.

 Brokers and analysts said the sector was due for a rebound with some property counters down more than 20 per cent from their highs in January.

 New World Development led the pack, rallying more than 4 per cent to $41.40.

 The firm said yesterday that it might buy a 10 per cent stake in mainland property developer Beijing North Star, which is controlled by the Beijing government.

 Sun Hung Kai Properties rose 1.92 per cent to $79.75 and Cheung Kong gained 1.49 per cent to $68.25.

 Mr Tam said the share prices of property companies tended to lead prices in the property market by about six months. With the ongoing correction in residential property prices expected to bottom out in July or August, investors were positioning themselves for a rebound in stock prices.

 Meanwhile, with US long-bond yields stabilising just above the 7 per cent level, worries over another rise in interest rates had subsided, analysts said.

 Lower bond yields also helped banking stocks, with Hang Seng Bank rising 1.51 per cent to $84.25.

 Elsewhere in the index, utility China Light & Power rose 1.45 per cent to $35 despite posting lower than expected earnings growth of 7.3 per cent for the March half. Analysts said the counter gained after the company said 20 per cent shareholder Citic Pacific had helped the utility expand into China.

 Among smaller stocks, Companion Marble rose 2.5 per cent to $2.075 after its parent company Companion Building Materials said it might sell a stake in one of its subsidiaries. The parent's stocks was suspended at 66 cents.

 Companion Marble was the second-most active stock on the market in dollar terms, with more than $275 million worth of stocks changing hands.

 Investors will be paying particular attention to US 30-year Treasury bond yields in the coming days.

 BNP PrimeEast Securities sales director Allen Chang said: 'If the yield falls below 7 per cent the Hang Seng Index could go through 12,900 points.



Properties boost index