Asia Recovery?

Henry C.K. Liu hliu at mindspring.com
Fri Apr 16 22:29:37 PDT 1999


Saturday April 17 1999

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



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