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Hong Kong blue chips at record close

HONG KONG: Hong Kong's blue chip Hang Seng Index soared to a record close on Monday as investors flocked into heavyweights before the quarter's end and ahead of March futures expiring on Thursday.

The benchmark index, which surpassed the March 9 intraday high of 18,249.86 an hour after the open and tipped a high of 18,350.61, ended Monday up 2.86 percent or 508.29 points at 18,292.86.

Total market turnover was HK$15.5 billion (US$1.99 billion), up from Friday's HK$14.3 billion, but still less than February's daily average of HK$22.1 billion.

"Futures have been leading the market and the bounce is technical in nature," said Eugene Law, chief operations officer at Celestial Asia Securities.

"The market found a base last week at around 17,500, so it's some kind of snowball effect."

The blue chip index has slowly climbed since closing at 16,359 on March 16 amid a global sell-off in techs and concern over tension between China and Taiwan ahead of the island's presidential election.

But investors have become more optimistic after Taiwan president-elect Chen Shui-bian's conciliatory comments last week and Wall Street's strong performance.

Also boosting stocks was relief over interest rates, after the Hong Kong Association of Banks hiked rates a quarter point as expected on Friday, and also strong blue chip earnings as the Asian recovery sets in, analysts said.

"With futures expiring on Thursday, technically the market looks positive and trending upwards," said Ben Kwong, associate director at KGI Asia Ltd. "There's some follow-through buying on lagging banking and property."

Fund managers were holding on to big cap stocks and buying stocks in which they already have a big weighting to boost their portfolios before the end of the first quarter, said Michael Liang, vice president of Asian equities at Daiwa Securities.

"The market will be well supported until the futures expire," said Liang. "The investment community will want the market to stay high so will close out their positions probably at the beginning of April."

Hong Kong's largest bank, HSBC Holdings Plc, vaulted 2.7 percent or HK$2.50 to HK$94.50, helping to push the banking index up 2.7 percent.

Hutchison Whampoa Ltd and its parent Cheung Kong (Holdings) Ltd, which also posted strong earnings last week, both rose.

Cash-happy Hutchison said on Monday afternoon it was forming an e-commerce joint venture with US software giant Oracle and would be seeking a listing for portsnportals.com, a new business unit linking the e-commerce services and products of its ports division.-Reuters