Hong Kong shares end morning sharply higher in rebound

Hong Kong shares end morning sharply higher in rebound - UPDATE

	Published : Fri, 20 Apr 2007 06:42 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Share prices finished the morning session sharply higher in a rebound after yesterday's sharp drop, with investors hoping that China will take a measured approach as it tries to cool down its economy, dealers said.

They noted that the Shanghai market also bounced back after dropping 4.5 pct yesterday due to worries over possible macro-economic tightening measures.

China is widely expected to announce further policy tightening measures after first-quarter gross domestic product growth and March inflation came in stronger than expected.

Mainland property developer Country Garden Holdings was in focus as it posted sharp gains on its trading debut.

The Hang Seng Index ended the morning up 180.94 points or 0.89 pct at 20,480.65, off a low of 20,474.31 and high of 20,549.92.

Turnover was 32.55 bln hkd.

'The rebound today is quite reasonable after yesterday's sharp fall, with select blue chips and China related stocks driving the gains,' said Kitty Chan, director of Celestial Asia Securities Holdings.

Investors took note of gains on China's A-share markets, she said.

But Chan added that the local bourse will not see further strong momentum as investors await possible policy announcements in China.

'I don't think the market will have strong upside momentum in the near term... and it may be hit again if the Chinese government announces credit-tightening measures,' she said.

She expects the index to hover around the 20,500 level in the near term.

Large-caps rebounded from yesterday's fall, with China Mobile gaining 1.05 hkd or 1.45 pct at 73.55 and HSBC rising 1.0 hkd or 0.70 pct to 144.20.

Other local banks were also higher, with Hang Seng Bank up 0.80 hkd or 0.72 pct at 111.60, Bank of East Asia up 1.0 hkd or 2.14 pct at 47.7 and BOC Hong Kong up 0.22 hkd or 1.15 pct at 19.32.

Among other blue chips, Hutchison Whampoa was up 0.5 hkd or 0.66 pct at 75.75, Swire Pacific up 1.30 hkd or 1.44 pct at 91.50, Cheung Kong up 0.2 hkd or 0.2 pct at 101.0, and China Construction Bank up 0.08 hkd or 1.67 pct at 4.86.

In China financials, China Life gained 0.35 hkd or 1.44 pct at 24.65, ICBC up 0.03 hkd or 0.69 pct at 4.36, Bank of Communications up 0.05 hkd or 0.59 pct at 8.46 and Bank of China up 0.03 hkd or 0.76 pct at 3.99.

Mainland property firms were mostly higher despite speculation that the sector may be among those that may be hit by the Chinese government's expected credit-tightening measures.

Dealers said the stocks were also boosted by the strong trading debut of Guangzhou-based developer Country Garden in Hong Kong today.

Agile Property was up 0.07 hkd or 0.87 pct at 8.15 and China Overseas Land up 0.06 hkd or 0.61 pct at 9.95.

R&F Properties was up 0.84 hkd or 4.47 pct at 19.62 after it said it plans to issue up to 450 mln A shares to strategic investors, institutional investors and public investors in mainland China.

Country Garden was at 7.2 hkd, up 34 pct from its initial public offering (IPO) price of 5.38 hkd. It opened trade at 7.0 and hit a high of 7.35.

Among local property stocks, Henderson Land was up 0.45 hkd or 0.96 pct at 47.45, Sun Hung Kai up 0.60 hkd or 0.66 pct at 91.45, Sino Land up 0.16 hkd or 0.97 pct at 16.66 and Wharf Holdings up 0.20 hkd or 0.69 pct at 29.1.

The property sector sub-index was up 148.30 points or 0.62 pct at 24,230.76.

Lenovo Group was up 0.06 hkd or 2.1 pct at 2.92 after announcing plans to lay off about 1,400 workers, which would generate savings of some 100 mln usd in the fiscal year ending next March.

Tsingtao Brewery surged 1.12 hkd or 8.5 pct at 14.30 after reporting a 46 pct rise in 2006 net profit to 448 mln yuan under international accounting standards.

Panva Gas lost 0.13 hkd or 3.07 at 4.11 after reporting net loss of 256.33 mln hkd for 2006, against a profit of 155.78 mln in the previous year.

China Netcom lost 0.29 hkd or 1.44 pct at 19.86 after announcing that its sales for the first quarter totaled 21.03 bln yuan, including upfront connection fees of 453 mln.

Excluding the effect of asset disposals and upfront connection fees, the company's first quarter revenue stood at 20.03 bln yuan, up just 0.2 pct over the same period a year ago.

(1 usd = 7.8 hkd)

roby.lau@xfn.com

rl/rc

Hong Kong shares end morning sharply higher in rebound - UPDATE