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Cathy Holcombe

A rally in HSBC stocks fuelled more than half of yesterday's 2.21 per cent jump in blue-chip shares.

 The Hang Seng Index rose 204.65 points to close at 9,433.99 points. HSBC's $10 rise to $206 contributed 130 points to the index's gains.

 The banking giant, which reported earnings for last year after the market's close on Monday, also accounted for 40 per cent of yesterday's $3.47 billion turnover.

 Wall Street's 212.73-point surge on Monday was an additional boost to sentiment, as reflected in a 1.45-per cent rise in the property sub-index to 12,131.17 points.

 While HSBC gained 5.1 per cent, subsidiary Hang Seng Bank rose 2.48 per cent to $61.75.

 ICEA Securities banking analyst Warren Blight said news of a New York listing and the acquisition of Seoulbank in South Korea had probably contributed more to the positive sentiment than the results themselves.

 'If you look at the numbers they were actually below consensus, although there was some alleviation of concerns on the asset quality side in Thailand and Indonesia,' Mr Blight said.

 The market was also relieved to see lending to mainland companies made up only 5 per cent of the Hong Kong loan book.

 Mr Blight did not feel the banking group had heard the last of the bad news in Asia.

 'I see provisions at a similar level or higher in 1999 on the basis of expecting non-performing loans to rise but in terms of earnings growth the effects won't be as significant.'  SG Securities head of sales trading Miles Remington said the numbers were comforting in the sense that there were no shocks.

 'This was one set of banking results which wasn't going to drag the market lower . . . it enables the market to concentrate on moving forward,' he said.

 'Comments on the the global listings with US dollar class shares are also underpinning share performance,' Mr Remington said.

 HSBC executives on Monday said they would like to list in New York this year. Listing would entail a unified stock class across the globe and issue of three shares for each one held.

 They said more details of the listing proposal would be provided at the annual general meeting in May.

 Mansion House Securities research head Stanley Ng Wing-chark said: 'After the split more retail players can buy. There will be more liquidity.'  Mr Ng thought yesterday's rise in HSBC was partly fuelled by short-covering as investors had been shorting the stock in the event of the results revealing a provisions shock from Asia or Latin America.

 'There had been a lot of negative rumours circulating but of course after the results it's difficult to spread any new negative rumours,' he said.

 Mainland-related shares missed out on yesterday's rally, with red chips falling slightly. Brokers said investors were steering clear of the sector.



Wall Street listing news helps boost key blue-chip counter 5.1pc