Hong Kong blue chips rose for a third straight day on Wednesday as Hutchison Whampoa and Cheung Kong shot up on the eve of their earnings reports, triggering buying in other blue chips.
China Mobile erased morning losses. It said after the market closed that its 2006 net profit climbed 23 percent, beating forecasts. China Agri-Industries Holdings Ltd soared as much as 60 percent in its debut.
"There's general buying after word came out that Hutchison may report good earnings," said Peter Lai, director at DBS Vickers. "Many funds have sold Hutchison short, and now they're covering their positions."
The benchmark Hang Seng Index reversed earlier losses to end up 159.51 points at 19,516.41 on turnover of HK$46.8 billion (US $6.0 billion), up from HK$39.6 billion on Tuesday. The China Enterprises index of H shares, or Hong Kong-listed shares in mainland companies, gained 0.6 percent to 9,307.16.
"This is a short-squeeze," said John Koh, fund manager at Daiwa Asset Management. "My gut feeling is that the market will consolidate further. People are still cautious about what's going to happen to the US economy."
Financial markets are eagerly awaiting word on how the US Federal Reserve views the economic outlook when it wraps up its two-day policy-setting meeting on Wednesday, with a decision to keep the overnight federal funds rate steady widely expected.
Hutchison Whampoa Ltd surged 3.1 percent to HK$75.45 in heavy trade. The conglomerate is forecast to report stronger 2006 earnings on narrowing losses at its third-generation telecoms business. Sister property developer Cheung Kong (Holdings), which is expected to see a 34 percent gain in 2006 net profit, leapt 2.3 percent to HK$94.55. China Agri-Industries, a spin-off of food processor COFCO International Ltd, traded between HK$5.5 and HK$5.95 in its debut before ending the day at HK$5.53, up 49 percent from its issue price of HK$3.72 per share. The company, which invests in biofuel businesses, was the day's most active share. COFCO fell 2 percent to HK$5.78 as prospects dimmed for the company after spinning off its high-growth biochemical unit.
China Mobile rose 1.2 percent to HK$73.65. HSBC Holdings Plc. climbed 1.5 percent to HK$134.20 from a downward-adjusted, ex-dividend price of HK$132.192, amid signs that the US subprime lending sector may be recovering. A government report showed the pace of US home construction rose 9 percent in February, beating expectations and subprime lender Accredited Home Lenders Holding Co said it won financing from a hedge fund.
Air China slid 2.4 percent to HK$5.60 in heavy trade, a day after reporting disappointing earnings, leading to a spate of cautious analyst reports, with Deutsche Bank downgrading the stock to hold.
Comments
Comments are closed.