Shares in Hong Kong edged up to a five-month high on Tuesday, supported by property picks, while Shanghai shares ticked higher in light volume ahead of a long public holiday. Both Hong Kong's Hang Seng Index and the Shanghai Composite Index rose 0.1 percent. The Hong Kong intraday peak and close were the highest levels since April 15.
Hong Kong property shares were boosted by news that developer Sun Hung Kai Properties will maintain its 2011 property sales forecast despite concerns that authorities might take further measures to curb prices. Housing prices in Hong Kong have risen 45 percent since the beginning of last year prompting the local government to roll out damping measures although recent land auction prices have suggested demand remains strong. Wharf Holdings rose 2.6 percent while Li Ka-shing- controlled Cheung Kong Holdings was up 2.3 percent. Sun Hung Kai shares were up 0.7 percent.
Credit Suisse recommends investors continue switching out of Hong Kong utilities and into local developers. Hong Kong Exchanges & Clearing (HKEx) fell 1 percent as investors cashed in recent gains in the stock on the back of a pick-up in trading activity and a robust IPO pipeline.
HKEx shares have risen 15.3 percent this month to be the third highest gainer on the Hang Seng. Luxury watch retailer Hengdeli Holdings Ltd slumped 6 percent after the company said it would raise HK$2.5 billion ($322 million) via a convertible bond offering. The new shares issued from the bond would represent just over 10 percent of the enlarged share capital and the news follows an announcement in August by the firm that it planned to sell just over HK$1 billion in new shares.
Shanghai stocks edged up to close at 2,591.6 in low volume ahead of a long holiday starting on Wednesday. The Shanghai market's A-share turnover fell to a two-month low of 66 billion yuan ($9.85 billion) from 90 billion yuan on Monday. Markets are closed September 22-24, October 1 and October 4-7. Property shares were mixed after local media reported China may impose a property tax early next year. Several analysts said they were sceptical.
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