Monday, April 6, 2009

Hong Kong Shares End At 3-Month High - Likely To Extend Gains

. Monday, April 6, 2009

By stockOzone team

Optimism on the Group of 20 nations' plan to provide US$1.1 trillion in funding and continuous capital inflow propelled Hong Kong stocks to end at a three-month high Monday.

Although it remains unknown when the global economy will emerge from the crisis, traders said the Hang Seng Index may soon rise to 15,800, driven by liquidity and expectations that China will be the least-hit economy in this crisis.

The blue chip Hang Seng Index rose 452.35 points, or 3.1%, to 14,998.04, after hitting an intraday high 15,147.06. It was the highest closing level since Jan. 6, when the index ended at 15,509.

Turnover totaled HK$62.19 billion, down from HK$71.44 billion Friday.

The G20 agreement is good news, although investors still have little visibility on global growth outlook, said UBS economist Jonathan Anderson.

"The most severe and concentrated downside macro shocks are likely behind us, with stabilization, or even some turnaround, in the pace of decline expected in the next quarter," Anderson said.

Ernie Hon, a strategist at ICEA Securities, said: "the aggressive stimulus moves by the major Western governments and central banks, including the quantitative monetary easing and fiscal packages, do create hopes for an end of the bear market. However, we still can't see when the (global) economic recession will end."

Delta Asia Financial's Head of Equity Markets Conita Hung said weakness in the U.S. dollar overseas also continued to attract funds into Hong Kong, fueling the latest market rally.

Hong Kong property companies were the top gainers, buoyed by government data published late last week that said property transactions in March rose nearly 60% from February, showing signs of recovery in the real estate market.

New World Development jumped 7.8% to HK$9.49, Sun Hung Kai Properties rose 3.6% to HK$81.40, and Hung Lung Properties was up 3.0% at HK$19.76.

HSBC rose 5.3% to HK$52.05, after it said 96.6% of its GBP12.5 billion rights issue had been taken up by shareholders, giving the bank additional cash to help it ride out the current crisis. [Source: The Wall Street Journal]

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