Hutchison buying leads market rally
A FLURRY of rumours involving Hutchison Whampoa dominated the Hang Seng Index yesterday with the stock helping rally the market after a sharp early decline.
The index slipped 10.85 points to 6,884.05 on turnover of $4.73 billion.
''The theme of the day was to buy Hutchison,'' said OCBC institutional salesman Philip Leung. ''Everyone is expecting in a couple of days they will launch a placement.'' Hutchison, the heaviest traded stock with turnover of $362.8 million, jumped 80 cents to $19.80.
Brokers said the stock had been supported by rumours that managing director Simon Murray might leave the company within two weeks.
There was also speculation that Hutchison had sold eight per cent of Husky Oil.
After Wednesday's 58.02 point climb, the index got off to a rough start with a sharp 59.65 decline to 6,835.25 by 10.45 am.
This was mainly caused by profit-taking of HSBC Holdings in London overnight, with one UK investment house dumping 1.5 million shares.
HSBC fell $1 to $72. It was the second-most heavily traded stock, with turnover of $308.8 million.
The blue-chip index then rallied to close the morning at 6,868.71 as heavy buying of Hutchison created momentum.
The rally continued in the afternoon, and the index nearly cracked 6,900 just after 3 pm before falling back to 6,884.05 at the close.
Traders noted signs of consolidation following the market's 465.84 point jump over the past two weeks.
''I think the market is beginning to look a bit frothy in the short term,'' said Mr Jan Perry, Pierson Securities' director of institutional sales.
Mr Perry said the conclusion of talks between China and British yesterday had given the market a welcome breather.
The two sides yesterday announced a third round of discussions would be held in Beijing from May 21 to 23.
Brokers said the news had been offset by concerns that a resolution of the political and economic issues would not be reached for months.
With the blue chip sector relatively flat, second and third-line counters continued to attract interest. The broader-based All Ordinaries Index climbed 2.73 points to 3,689.02, with four of the 10 most heavily traded stocks outside the Hang Seng Index.
Jinhui Holdings became the latest target for investors searching for laggard China-play stocks, with turnover of $146.3 million. It closed unchanged at $1.90.
Takeover rumours surrounded World Trade Centre for the second day, with turnover hitting $112.1 million. The stock jumped 11.9 per cent, 16 cents, to $1.50.
Toy-maker Harbour Ring attracted trade of $90 million after announcing a $56.5 million placement with majority shareholder International Toys on Wednesday. International Toys is selling the stake to other investors.
One broker said SHK Securities, which is placing the shares for International Toy, had been swamped by orders from institutions.
Uniworld Holdings, which has interests in manufacturing, retailing and property, was the most heavily traded stock for the second consecutive day, with volume of 189.6 million shares. The stock was unchanged at 4.1 cents.
Garment maker Unison International announced that the owner of 34.5 per cent of the company had been approached by an independent third party interested in acquiring the stake.