Hong Kong Closed at Record High, above 22,000

Hong Kong shares close at new record; index finishes above 22,000 UPDATE 2007-7-3 05:17:00 p.m. HKT, XFNA

HONG KONG (XFN-ASIA) - Share prices hit a new record high, with the main index closing above the 22,000 points level for the first time, as investors took their lead from a strong showing on Wall Street overnight and firmer China markets. Buying interest was also spurred by several corporate announcements, including China Shenhua Energy's mainland listing plans and Chalco's acquisition of Baotou Aluminium. Fund inflows, attributed mainly to China's expanded qualified domestic institutional investor (QDII) program, helped boost market activity The Hang Seng Index closed up 378.41 points or 1.74 pct at 22,151.14, off a low of 21,960.76 and just off a new all-time-high of 22,159.52. The index's previous closing high was 21,999.91, recorded on June 22 this year, while its previous all-time intra-day high was 22,085.59, reached on June 25. Turnover was 81.72 bln hkd. ""Overall investor sentiment was bullish and this enabled the market to close above 22,000 points for the first time today,"" said Alex Wong, asset management manager at Ample Capital. ""A combination of factors"" helped investors take a very bullish stance, he said, citing firmer overseas markets and positive corporate news flow. ""Several major corporate news, including Shenhua Energy's A-shares issue plan and a major acquisition by Chalco, were positive to the market,"" Wong said. ""Liquidity remains strong due in large measure to money from the mainland which is making (way) into the local market through QDII,"" he said, referring to China's program that allows overseas investment by some institutions. Wong noted that interest in China stocks was also boosted by easing of fears over liquidity in China's A-shares markets. Mainland officials have made some reassuring comments that a huge special government bond issue will have only a limited impact on liquidity. Other dealers noted that investors were also relieved that China did not announce any macroeconomic tightening measures over the holiday weekend. The Hong Kong market was closed yesterday for a public holiday following the July 1 anniversary of Hong Kong's return to China. Chalco led mainland firms higher, gaining 1.38 hkd or 10.47 pct to 14.56 after news that it will take over Shanghai-listed Baotou Aluminium Co in a cash or share swap deal. Chalco's A-shares in Shanghai ended up 3.73 pct at 23.94. China Shenhua surged 1.80 hkd or 6.59 pct to 29.10 after announcing plans to issue up to 1.8 bln shares for a listing in Shanghai. Among China financials, CCB gained 0.09 hkd or 1.67 pct at 5.47, Bank of China was up 0.051 hkd or 1.33 pct at 3.89, ICBC gained 0.011 hkd or 2.53 pct to 4.45 and China Life added 0.75 hkd or 2.67 pct at 28.85. The Hang Seng China Enterprises Index closed up 405.27 points or 3.38 pct at 12,406.39. New listing KWG Property Holding ended at 7.84, up 7.69 pct from the IPO price of 7.28. It opened at 7.4 hkd and hit a high of 7.95. Among blue chips, HSBC gained 0.70 hkd or 0.49 pct at 143.20, China Mobile was up 2.85 hkd or 3.39 pct at 86.80 and HKEx rose 8.20 hkd or 7.42 pct to an all-time high of 118.70. Local property developers were mostly flat, with Cheung Kong steady at 102.40 hkd, Sun Hung Kai Properties up 0.40 hkd or 0.43 pct at 94.50, Henderson Land unchanged at 53.25 hkd and Sino Land flat at 16.28 hkd. In the banking sector, Hang Seng Bank was up 1.10 hkd or 1.04 pct at 106. 90, Bank of East Asia rose 0.45 hkd or 1.02 pct at 44.45 and BOC Hong Kong added 0.20 hkd or 1.07 pct at 18.82. Elsewhere, PetroChina gained 0.52 hkd or 4.51 pct at 12.04, China Unicom was up 0.52 hkd or 3.86 pct at 13.98 and Angang Steel rose 0.38 hkd or 2.36 pct at 16.46. (1 HKD = 0.445 RM)