Investors pounce on developers on hints of early end to US interest-rate rises Hong Kong stocks powered to a seven-week high yesterday as investors flocked to snap up shares of blue-chip developers on hopes that the prolonged run of interest-rate increases in the United States will soon be over. The Hang Seng Index rose for a sixth straight trading day, closing up 176.7 points, or 1.18 per cent, at 15,062.35. It was the first time the index had ended the day above 15,000-point level since October 5. 'Property stocks are shining,' SHK Financial Group strategist Castor Pang Wai-sun said. 'Funds are rushing into the market as hopes that the upward interest-rate cycle may peak soon have boosted buying appetite for blue chip developers.' Speculation that the rate cycle may peak sooner than previously believed followed the release yesterday of minutes of the November 1 Federal Reserve policy meeting which showed some officials expressed concern that the increase in rates may have gone too far. The widely held view in the market had previously been that rates would peak only by the third quarter of next year, Mr Pang said. Investors should get more clues from the Fed after the next meeting of its rate-fixing committee on December 13. Riding the positive sentiment, the Hang Seng properties sub-index recorded its biggest percentage gain in 16 months - 3.13 per cent. Weakening property sales appeared to have no impact on investors' enthusiasm, with developers higher across the board. Among them, Sino Land was the star, rallying 8.14 per cent to close at $9.30. Hang Lung Properties was another hot pick, up 4.52 per cent to $11.55. Sun Hung Kai Properties gained 2.28 per cent to $76.40 while Henderson Land Development climbed 2.49 per cent to $35. Cheung Kong moved up 2.85 per cent to $81.20 while New World Development rose 2.5 per cent to $10.25. Interest rate-sensitive banking stocks also gained yesterday as investors looked for market laggards, brokers said. HSBC went ex-dividend yesterday. The banking giant would have gained 0.72 per cent had it not been for the adjustment made for its $1.09 payout. BOC Hong Kong climbed 1.71 per cent to finish at $14.90 while Bank of East Asia rose 0.43 per cent to $23.25 and Hang Seng Bank edged up 0.39 per cent to $103.60. The performance of telecommunications stocks was mixed. China Mobile, the world's biggest mobile-phone operator by subscriber numbers, jumped 1.87 per cent to $38.10, contributing almost a quarter of the rally in the index. Hutchison Whampoa climbed 2.29 per cent to finish at $75.80. But PCCW lost 0.51 per cent to $4.925 and China Telecom was down 0.92 per cent at $2.70. Market turnover was heavy at $21.93 billion, up 51.4 per cent on the $14.48 billion turnover recorded on Tuesday. 'Liquidity remains strong in the local stock market which will fuel further rallies,' said Kingston Lin King-ham, an associate director at Prudential Brokerage. 'Nonetheless, rising oil prices remain a possible downside risk for the market in the near term.' Concerns over rising oil prices had been weighing on the market lately as colder than expected weather in the US and Europe might boost heating demand, brokers said. However, oil stocks managed to benefit from the high oil prices. CNOOC gained 2.97 per cent to $5.20, PetroChina was up 3.33 per cent at $6.20 and Sinopec rose 0.7 per cent to $3.60. The latter two refining giants helped the H-share index end the day 1.28 per cent higher at 5,104.32 points. 'Betting on a yuan revaluation, investors also showed keen interest in China-related stocks,' said Simon Lam Ka-hang, a research director at Christfund Securities. The yuan closed at 8.0816 per US dollar - its highest since Beijing widened the currency's daily band against the greenback on July 21. Tianjin Development rose 10.14 per cent to close at $3.80 while China Life Insurance was up 1.65 per cent at $6.15. Aluminum Corp of China edged up 0.99 per cent to $5.10 while China Shenhua Energy added 1.79 per cent to $8.55.
