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SCMP Reporter

THE issue that had dominated stock market thinking for so many years proved an anti-climax.

  'It is a non-event. The market is up on one of the lowest-volume days this year,' said one American trader.

   The Hang Seng Index gained an unconvincing 38 points to close at 9,530.

   'Everyone who has flown over the area knows it is going ahead, so the agreement is merely a formality and will have no effect on the economy,' he said.

  Analysts said the agreement was mostly symbolic and had been factored into the market weeks in advance.

  And while it does signal better Sino-British relations, there are still other areas, such as the Container Terminal 9 where there is no sign of a breakthrough.

  Since the plans for a new airport were unveiled, the market had been mesmerised by the progress.

   Every announcement, rumour, setback or apparent advance had set stocks swinging, and for many analysts it had seemed a full agreement on the project would be Nirvana.

  But, instead of getting ready to dance in the streets, investors seemed to be preoccupied with other factors.

  The index might get a short-lived boost from the latest moves, but euphoria was not on the agenda.

  Kirk Sweeney, head of research at Lehman Brothers, said: 'This is already largely in the stock market prices, so I do not think it is all that meaningful.'   Credit Lyonnais research director Jim Walker said the agreement would have little effect on the economy or the stock market.

  'It has been so well heralded over the past two weeks that it is all in the prices.'   The change in sentiment is dramatic. Six months ago when political concerns were dictating the daily movements of Hang Seng, an agreement could have pushed the market through the roof. But the economic climate has changed since then and people are concerned with interest rates rather than politics.

  One reason the market will not be popping the champagne corks is that there are still several more airport issues to be resolved, including land allocations.

  'With no agreement over the funding the port authority, it is a bit of a hollow agreement,' said Baring Securities head of Hong Kong research Peter Rice.

  There will be some immediate spin-off for some of the smaller listed companies who stand to benefit directly from the agreement.

  If an investor wanted to build a portfolio around the airport, there are around 20 construction and building contractors listed who could be in line for lucrative contracts.

    International Tak Cheung may be one of the biggest beneficiaries, as it is heavily involved in civil engineering work and manufacturing concrete products.

  Its subsidiary Paul Y ITC is a major civil engineering and construction company which is already involved in some of the airport roads projects.

  B+B Asia is another civil engineering company backed by a powerful German group. It specialises in piling and substructure work.

  Sung Foo Kee Holdings is another outside chance. The company is a long-established building contractor with government licence to tender for contracts unlimited in value.



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