Hong Kong stocks struck fresh five-week highs on Tuesday, rising 1 percent as strong Asian markets buoyed investor confidence, prompting them to buy China Mobile Ltd and other heavyweights.
Newcomer CITIC 1616 Holdings surged in its first trading day to become the best-performing IPO in the year so far, after raising $270 million in an offering that drew massive investor demand. "This will keep the IPO frenzy going," said Steve Cheng, associate director at Shenyin Wanguo.
The benchmark Hang Seng Index closed above the key 20,000 level with a rise of 193 points to 20,002.70, its highest since February 27. Turnover was HK$40.0 billion (US $5.1 billion) compared with Monday's HK$42.4 billion.
Market professionals said the true test for the market could come next week after the long Easter holiday. "The technical outlook of the Hang Seng Index has improved, but turnover is thin. The question is whether the index can stay above 20,000 after the holidays," said Kenny Tang, associate director at Tung Tai Securities.
The China Enterprises index of H shares, Hong Kong-listed shares in mainland companies, also set a five-week high, gaining 0.8 percent to end at 9,724.27. China Mobile, the biggest boost to the blue chips, climbed 0.9 percent to HK$70.90. HSBC Holdings Plc, the day's most active stock, edged up 0.4 percent to HK$136.90. CITIC 1616, the telecoms services spin-off of Beijing-run conglomerate Citic Pacific, ended at HK$4.31, near the lower end of the day's trading range. Still, it was a 67 percent gain from its issue price of HK$2.58 per share, just beating the 66 percent rise seen in China Huiyuan Juice's February debut, which had been this year's top listing.
Cheung Kong (Holdings) advanced a further 2 percent to HK$102.40 and New World Development shot up 2.9 percent to HK$18.18. The Hang Seng property sub-index rose 1.7 percent.
China's second-largest listed electricity producer, Datang International Power Generation Co Ltd, surged nearly 10 percent in intraday trade after saying it expected power generation to grow at least 20 percent and its utilisation rate to stabilise this year after a breakneck 2006 expansion. The shares eased back to end 2.1 percent firmer at HK$7.98 as investors bet on a steady bottom line in 2007.
Deutsche Bank upgraded Datang to buy from hold, saying new capacity should deliver full potential from this year. European-focused apparel retailer Esprit Holdings Ltd set a fresh record amid a strong euro before ending at HK$95.25, up 1.1 percent. Jiangxi Copper rose 1.1 percent to HK$9.91, earlier setting an all-time high amid global supply concerns.
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