Cheung Kong and Hutchison both surge after Morgan Stanley raises target price for the property developer Property developer Cheung Kong closed at its highest for 31/2 years yesterday helping the Hang Seng Index rise above the key 14,200-point level while turnover jumped to more than $21 billion. The benchmark index rose 160.35 points, or 1.13 per cent, to end the day at 14,307.3, just one point below the inter-day high. The index traded between 14,140.4 and 14,308.37 during the session on turnover of $21.98 billion, up from $17.57 billion on Tuesday. 'Cheung Kong and Hutchison were the drivers of [yesterday's] upside as the index heavyweight HSBC was stagnant,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities. Cheung Kong was the second-biggest blue-chip gainer, rising 3.69 per cent to $78.55, the highest closing level since February 2002, after Morgan Stanley lifted the target price of the company to $100 from $85. The United States brokerage said in a report issued in the morning that the rise in Cheung Kong's target price was based on 'higher sales prices for the firm's Hong Kong developments and continued strong land acquisitions in Hong Kong, China and Singapore'. The report also had a more positive view on Hutchison, prompting the conglomerate's shares to jump 2.5 per cent to $73.80. HSBC, which accounts for about 33 per cent of the index weighting, added only 0.56 per cent to $125. Sun Hung Kai Properties rose 1.64 per cent to $77.15 after Macquarie Research said in a note to clients that the company's plans to launch 8 Severn Road and Canary West in September and October 'should be a good share price driver'. Listing candidate Guangzhou R&F Properties will makes its trading debut today with analysts expecting a fall of about 5 per cent to 8 per cent on the 'low subscription response, poor sentiments towards the sector and the expensive valuation', said Mr Tang. However, Shanghai Donghua Petrochemical ended with a gain of 5.66 per cent to 56 cents on its debut yesterday. Sing Tao News closed 13.15 per cent higher at 43 cents despite soaring 71 per cent in the morning, boosted by its one-off special gain of $190.89 million from the sale of its Kowloon Bay office building for $370 million. However, the number of shares changing hands was worth only $2.69 million. The media group, which made a net profit of just $4.7 million last year, has just started publishing a free newspaper for distribution. Guangdong Tannery surged 27.35 per cent to 27 cents after its parent GDH offered to privatise the company for $147 million, or at 28 cents per shares on Tuesday. GDH's offer represents a premium of 14.1 per cent to Guangdong Tannery's net asset value as of the end of last year. Mainland engine maker WeiChai Power tumbled 7.03 per cent to a day's low of $17.85 before ending 4.42 per cent lower at $18.35 after CSFB significantly revised down the company's target price to $21 from $30.20. The European brokerage also cut WeiChai's earning forecasts for this year to 2007 by 25 per cent to 32 per cent as it expects lower sales growth. Sun Hung Kai Financial Group revised down the target of the Hang Seng Index and the H-share Index yesterday. It lowered the target of the blue-chip index by 2.5 per cent to 15,300, due to the faster the expected interest rate increases. However, SHK Financial was confident that the Hang Seng Index could reach the revised target level by the end of this year, supported by declining unemployment, rising income and the effects of the opening of the Disneyland theme park. The forecast for the H-share index was revised down from 5,300 points to 5,100 points, as Chinese companies normally absorbed a lot more of the cost increases related to high oil prices. Alvin Chong, head of research at SHK Financial, believes oil prices will remain high, fluctuating between US$55 and US$65 a barrel this year and US$50 to US$60 next year. 'Investors are concerned about insufficient oil supply, pushing the oil prices to stay at a high level,' he added.