Stocks advance, developers climb
Updated: 2010-10-09 06:57
(HK Edition)
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Hong Kong stocks advanced, driving the index to a two-year high, as real-estate companies surged and as speculation increased that policy makers around the world will take steps to spur growth.
Sun Hung Kai gained 2.3 percent after reports say the company sold additional homes. Cheung Kong Holdings climbed 3.4 percent after its billionaire chairman, Li Ka-shing, bought shares. Zijin Mining surged 12 percent as gold futures jumped to a record in Shanghai.
Prospects of further monetary easing are "wonderful for Hong Kong," said Khiem Do, Hong Kong-based head of multi-asset strategy at Baring Asset Management (Asia) Ltd. "Hong Kong is the biggest beneficiary of zero percent interest rates from the US because of its currency peg. That's helping to fuel demand for property, stocks and bonds."
The Hang Seng Index rose 0.3 percent to 22,944.18. The gauge advanced 2.6 percent this week. The Hang Seng China Enterprises Index increased 0.2 percent to 12,758.23.
Futures on the CME Group exchange show a 32 percent chance the US Federal Reserve System will cut its target rate for overnight bank lending to zero by November, up from a 26 percent probability a month ago. The rate is currently in a range from zero to 0.25 percent.
The measure near 23,000 "looks overbought in the short term, but the rally may extend as foreign fund inflows rise amid prospects of further quantitative easing" by central banks, said Castor Pang, Hong Kong-based research director at Cinda International Holdings Ltd. "Hong Kong property-stock valuations are still low given rising housing demand."
Bloomberg News
(HK Edition 10/09/2010 page3)