Hong Kong blue chips closed up 1.58 percent on Monday, after the decision to pull a listing of the city's first real estate investment trust ended a week of uncertainty. The Hong Kong government shelved a US $3 billion property privatisation deal late on Sunday after a legal challenge from a pensioner, but said it had already begun work to relaunch the initial public share offer for the Link REIT.
The benchmark Hang Seng Index ended 221.6 points higher at 14,214.04, adding to last week's 0.65 percent rise. Turnover was at HK$22.6 billion (US $2.9 billion), compared to HK$19.7 billion at Friday's close.
"Investors have already digested the news about the Link REIT, and so all the hesitation from last week, when the outcome was uncertain, is gone," said Alfred Chan, chief dealer at Cheer Pearl Investment Ltd.
Traders said they expect the Hang Seng to trade between 13,900 and 14,350 over the rest of the week. They added that locked-up funds returning to REIT investors were likely to find their way back into the stock market over coming sessions given the low interest rate environment.
"There's so much money lying around that punters are willing to use their money. Today is a case of pent-up demand, because the market was going nowhere last week," said Francis Lun, general manager at Fulbright Securities.
The Hang Seng Properties sub index outperformed the Hang Seng, rising 1.67 percent, or 295.07 points, to 17,988.7.
Investors are still positive about the property market, Chan added, since they expect a recent increase in the amount of yuan mainland tourists are allowed to carry into the city to fuel demand for Hong Kong property. Major player Cheung Kong (Holdings) Ltd gained 1.7 percent to HK$74.75.
US light crude dipped early on Monday in Asian trade, but held most of last week's over-$5.50 gains amid renewed threats to Middle East output, dealers said.
Tarnished by a scandal at one of its top customer, Irico Group, China's largest maker of colour television tubes, traded 25 percent below its issue price of HK$1.58 early on its market debut but closed unchanged at HK$1.44.
Hong Kong's dominant airline Cathay Pacific rose 0.34 percent to HK$14.75 despite higher oil prices. Fuel accounts for a big portion of airline costs.
China Mobile, the world's largest mobile carrier by subscribers, rose 2.28 percent to HK$26.95 after it said it added 3.27 million subscribers last month - its second strongest total for the year.
Rival China Unicom rose 2.48 percent to HK$6.20 after it netted 1.55 million subscribers in November.
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