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HK stocks end higher pre-holiday, techs up on FOMC

HONG KONG: Hong Kong stocks ended higher on Thursday ahead of the Chinese New Year holiday led by Internet-linked companies, with investors calmed by news that US interest rates rose by only the predicted quarter point.

"Investors were enthusiastic about technology and the Internet, even as interest rates are going up," said Andy Xie, chief economist at Morgan Stanley Asia Ltd.

The blue-chip Hang Seng Index rose 1.13 percent or 178.30 points to close the shortened trading week at 15,968.12, while the Hang Seng commerce and industry index jumped 1.78 percent to 10,790.52.

China Telecom (Hong Kong), which makes up almost 20 percent of the Hang Seng according to Reuters 3000, led the index up.

The telecoms giant, which is often used by investors as an index proxy, surged 6.42 percent or HK$3.20 to close at HK$53.00.

"There's still a lot of focus on some of the blue-chip technology stocks such as CITIC Pacific and PCCW," said James Poon, head of sales at Warburg Dillon Read.

CITIC Pacific resumed Wednesday's rise on speculation the China-backed investment conglomerate would form a joint venture with a US-based technology company. CITIC Pacific rose 4.39 percent or HK$1.60 to HK$38.00.

Sun Hung Kai Properties was another blue chip Internet gainer, jumping 3.0 percent or HK$2.25 to HK$75.00. The Hong Kong property company said late on Wednesday it applied for a separate listing of its Sunevision Internet services unit on Hong Kong's Growth Enterprise Market (GEM).

The application came as Sun Hung Kai's rival, Cheung Kong (Holdings), prepares to list its Internet portal firm, TOM.COM, on GEM.

On Thursday Cheung Kong said Internet and communications company Pacifc Century CyberWorks Ltd (PCCW) had agreed to buy a five percent stake in TOM.COM.

PCCW rose 2.93 percent or HK$0.55 to HK$19.30 while Cheung Kong gained HK$0.50 to HK$102.50.

Joining the blue-chip gainers was Bank of East Asia Ltd which gained on greater confidence in the bank's China strategy and its success with electronic banking initiatives, analysts said. The bank soared 6.4 percent or HK$1.30 to HK$21.35.

The market held its gains today at a time when many local retail investors cash up before the New Year holiday, leading analysts to be optimistic about the year ahead.

This is despite concerns that the Fed's policy arm, which next meets on March 21, will bump up borrowing costs once again.

"We are still expecting the market to open the Year of the Dragon on a bullish note," Tai Fook Research said in a report today.

A total of 532 issues rose and 190 declined on turnover of HK$17.86 billion (US$2.3 billion), up from Wednesday's HK$16.6 billion.

"People are quite confident," said Peter Redhead, head of HK Research Securities at Jardine Fleming. "They're not getting out of it (the market)." He said a lot of new listings are likely to come up after the New Year break.-Reuters