Shares of rail giant MTR Corp bucked the stock market's broad decline yesterday, ploughing ahead to a record high as investors chased the stock as a viable property play.
The stock added 3.25 per cent to HK$31.80 as the Hang Seng Index plunged 2.44 per cent to 26,887.28 points on global economic jitters.
Some analysts attributed MTR Corp's advance to 'buying of laggards', but others said new rail projects in the pipeline fuelled buying interest, following the merger of underground services with Kowloon-Canton Railway Corp's rail network last month.
The stock's closing price yesterday exceeded the target prices of two major brokerages set in November - HK$29.10 by Merrill Lynch and HK$28.90 by Citi.
'MTRC was a laggard compared with other major property developers, which saw their share prices gain handsomely on recent interest rate cuts,' JP Morgan analyst Raymond Ngai said. 'Investors appear to be attracted to the corporation's potential in lucrative property development on new rail projects, especially the highly rumoured Sha Tin to Central rail link.'
Rumours spread that the government would offer MTR property development rights above a planned depot at the former Kai Tak airport in east Kowloon to make the Sha Tin-Central rail project financially viable.