Hong Kong shares end morning higher on earnings leads, US rate cut hopes UPDATE

Hong Kong shares end morning higher on earnings leads, US rate cut hopes UPDATE

	Published : Thu, 22 Mar 2007 06:45 By : Agencies Print this Story

HONG KONG (XFN-ASIA) - Share prices finished the morning session sharply higher on expectations of positive results announcements from blue chips Cheung Kong and Hutchison Whampoa, dealers said.

They said sentiment was generally boosted after the US Federal Reserve appeared to have left the door open for an interest rate cut later this year after keeping rates on hold at its latest meeting.

Cheung Kong and Hutchison announced their results after morning close.

The Hang Seng Index ended the morning up 237.70 points or 1.22 pct at 19,754.11, off a high of 19,772.87 and low of 19,703.21.

Turnover was 31.35 bln hkd.

'Comments by Fed officials on inflation and economic growth have given some hints of their willingness to cut interest rates,' said Tony Espina, dealing director at Goldride Securities and chairman of Hong Kong Stockbrokers Association.

'The strong gains also came against a generally positive backdrop. Chinese companies listed on the local bourse are expected to continue performing well, specially because China's National People's Congress did not adopt strong austerity measures, contrary to some people's fears,' he said.

Kitty Chan, director at Celestial Asia Securities Holdings, said a rally on Wall Street overnight and expectations of strong earnings from Cheung Kong and Hutchison Whampoa led to the market's gains.

'After the Fed kept rates unchanged, many investors are now entertaining hopes of a possible rate cut in the second half of the year,' she said.

In the statement that accompanied the Fed's decision to leave short-term interest rates unchanged at 5.25 pct, the central bank said 'future policy adjustments' will depend on inflation and growth -- more neutral language that the market interpreted as opening the way for a possible rate cut.

Cheung Kong was up 2.15 hkd or 2.27 pct at 96.70 and Hutchison Whampoa was up 0.50 hkd or 0.66 pct at 75.95 ahead of their results announcements.

Hutchison announced after morning close net profit of 20.03 bln hkd for 2006 against 14.34 bln a year earlier, while Cheung Kong reported a net profit of 18.08 bln hkd compared with 13.995 bln.

China Mobile was down 1.0 hkd or 1.36 pct at 72.65 on profit-taking following recent gains in the run-up to its results announcement yesterday.

The company announced a 23.3 pct rise in 2006 net profit to 66 bln yuan due to strong growth in its subscriber base and value-added businesses, as well as improved operations in the rural areas.

Among other blue chips, HSBC was up 2.0 hkd or 1.49 pct at 136.20, Swire Pacific up 2.40 hkd or 2.77 pctd at 88.95 and Sun Hung Kai Properties up 1.80 hkd or 2.04 pct at 90.25.

Hang Seng Bank was up 1.10 hkd or 1.01 pct at 110.30 and Bank of East Asia up 0.85 hkd or 1.93 pct at 44.85.

BOC Hong Kong gained 0.34 hkd or 1.78 pct to 19.44 and its parent Bank of China was up 0.05 hkd or 1.29 pct at 3.93 ahead of their full-year results announcement later today.

The property sub-index rose 481.80 points or 2.10 pct to 23,442.16 with Sino Land up 0.30 hkd or 1.84 pct at 16.58 and New World Development up 0.48 hkd or 2.82 pct at 17.48.

Henderson Land was up 0.40 hkd or 0.92 pct at 43.75 after reporting strong profits from property development business for the first half to December, though the net profit fell 50 pct to 3.79 bln hkd due to lower revaluation gains.

Among other companies that announced results yesterday, Li & Fung lost 0.40 hkd or 1.47 pct at 26.75 and Wharf Holdings was up 0.45 hkd or 1.63 pct at 28.

Li & Fung announced a net profit of 2.20 bln hkd, up 22.9 pct from year earlier on strong sales, while Wharf's net profit fell 23 pct to 10.76 bln hkd due to a drop in revaluation gain.

Among H shares, PetroChina was up 0.11 hkd or 1.28 pct at 8.68, Chalco up 0.25 hkd or 3.20 pct at 8.07 and China Life up 0.35 hkd or 1.50 pct at 22.40.

The Hang Seng China Enterprises Index was up 165.83 points or 1.78 pct at 9,472.99.

(1 usd = 7.8 hkd)

jun.concepcion@xfn.com

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