Spree sends index close to 12,500
SUZANNE HARRISON
The Hang Seng Index broke through the
12,000-point barrier yesterday to close at its
highest level for 17 months.
A burst of buying, which spread around the
region, pushed the index 4.41 per cent higher
to 12,490.3 - 528.07 points up.
Brokers processed orders worth $11.49
billion - more than double the daily average
turnover this year.
The impetus for the surge came from Wall
Street's continued strength and a belief that
Asian economies have turned the corner.
Hongkong Telecom shares jumped 8.48 per
cent to $18.55.
The company, which dominates the SAR's
fledgling Internet market, has rallied this week
amid enthusiasm for technology and
Internet-related stocks.
"My read on the market is that there has been
a lot of institutional money that was waiting
to get in," Vickers Ballas research director
Andrew Fernow said of the day's trade.
"The trigger could be a general belief that the
economic outlook is turning the corner . . .
and I think Hongkong Telecom are in a very
hot area, and that's the Internet business.
Investors are quite excited."
Market heavyweight HSBC jumped $7, or
2.59 per cent to $277 - only $2 shy of its high
of $279 reached at the height of the bull
market in July 1997. The index hit 16,673.27
points at its peak, the next month.
Since early April, the Hang Seng has been
lingering below 12,000 points, with market
sources speculating a break would not be
likely this week.
But the past few days have seen gains in
major and minor technology stocks in the
wake of several Internet-related deals.
Second-tier SmarTone confirmed an
agreement to link-up with Internet search
engine Yahoo!, and major player Wharf
Holdings - whose shares finished yesterday
up 9.82 per cent at $18.45 - said it would
introduce high-speed Internet services
through its cable network.
Kim Eng head of research Stephen Brown
said: "I would honestly say that we've entered
a new bull market. In a bull market, all news
is good news and you get the feeling that
that's what's happening now."
Property and banking stocks took off,
following a cut in lending rates last week and
ahead of next week's first land auction since
the Government suspended them last year.
Great Eagle Holdings shares soared 13.65 per
cent to $12.90. On Wednesday, the firm
posted a net profit of $1.4 billion for the 15
months to December, which brokers said was
in line with expectations. Hang Seng Bank
rose 7.56 per cent to $81.75.
But with all the enthusiasm, some market
sources said they were surprised by the influx
of investment.
"It's a bit overdone in terms of the extent that
the market has been driven to," Mr Fernow
said.
"That may not be sustained. It's well
supported for the time being, but whether or
not it can keep going . . . it is vulnerable to
bad news."
Hong Kong saw one of the region's biggest
rises yesterday, but was still outdone by
markets in Thailand and Indonesia which
soared 8.59 per cent and 7.16 per cent
respectively.
"Compared to the US and Europe, Asia is
cheaper," said Salomon Smith
Barney-Citibank Asset Management director
Giampaolo Guarnieri.
SCMP April 17, 1999