bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

David Robinson

Hang Seng Index hits 16-month high as confidence deepens

Global funds reallocating capital to Asia sent Hong Kong stocks soaring yesterday as bullish investors bet on a regional economic revival following fresh indicators of strength in the United States economy.

Property stocks were targeted by international funds moving into the region in anticipation of a strong last quarter of the year amid hardening talk of 'reflation' in Asia's bombed-out asset markets.

The Hang Seng Index surged 2.81 per cent to a 16-month high of 11,546.12 points on a turnover of $19.84 billion, the second highest this year.

'The more conservative European and United States investors are finally convinced things have turned,' BNP Paribas Peregrine regional property research director Adrian Ngan said.

Goldman Sachs chief Asian strategist Timothy Moe said global funds' tendency to shift funds on a quarterly basis meant that the region could expect to be the recipient of substantial money flows.

Following Wednesday's strong performance on Wall Street, optimistic profit forecasts by US firms and data showing manufacturing had expanded for a third consecutive month, regional investors' were encouraged that a US recovery was under way, analysts said.

However, figures released yesterday showed an increase in US unemployment, and a sharp fall in manufacturing orders in August.

Markets in the region rallied. Japan's Nikkei-225 Index jumped 2.24 per cent, Taiwan's Weighted Index leapt 2.11 per cent, South Korea's Composite Index gained 1.55 per cent and Singapore's Straits Times Index rose 0.81 per cent.

Driving Japanese stocks higher were companies that depend on domestic demand as investors expect a stronger yen will mean they will have more to gain from an economic recovery than exporters. The yen gained 7.5 per cent against the US dollar in the past quarter.

JP Morgan head of regional strategy Spencer White said the weak dollar meant Asia had become more attractive to global investors. 'Attention has turned to the reflationary dynamic of a weaker dollar throughout Asia,' he said.

The greenback declined further against the yen yesterday to a 33-month low of 110.12  before Japan's finance ministry bought dollars for yen.  The dollar stood at 110.65 yen in New York early afternoon trade yesterday.

Taiwan stocks posted their biggest gains in five weeks following the government's scrapping of a 12-year old rule that limited investment by overseas funds.

Property stocks drove the Hong Kong market, with Sun Hung Kai Properties soaring 8.36 per.

A European research group confirmed the trend of China-based property stocks hugely outperforming bricks and mortar investments elsewhere in the world. Hong Kong property shares led the real estate sector globally due to  growth prospects in China, according to a monthly European Public Real Estate Association  report, cited by Reuters.

The group's Hong Kong index jumped 11.8 per cent last month, after a 21.3 per cent rise in August, underpinning a 0.5 per cent gain in Asia as a whole. This compared with a 1.3 per cent fall for international property stocks.

CLSA property analyst John Saunders said many global funds which had missed last month's property rally  were now pouring money into Hong Kong equities.

Markets Report - B10



Hang Seng Bank co-founder’s kin pays US$9.3 million for Hong Kong luxury flat

Hong Kong developers push for smoking ban at construction sites after deadly fire

Hong Kong developers, hoteliers offer free lodging to Tai Po fire victims

Chinachem secures plot in Hong Kong’s Tsuen Wan for US$318 million

Sun Hung Kai Properties

Asia funds focus lifts HK stocks