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HK's Hang Seng closes at record on positive budget

HONG KONG: Hong Kong's Hang Seng Index set a record close on Wednesday, finishing up 86.07 points or 0.48 percent at 17,951.43 in the midst of the government's upbeat 2000/2001 budget address. The index soared to an all-time high of 18,058.97 in later afternoon trade, lifted by positive economic data released by Financial Secretary Donald Tsang during his budget presentation.

"There was general relief that there are no hikes in taxes and that the GDP figures have come in above consensus," said Jolyon Petch, head of research at ING Barings.

Tsang said Hong Kong's economy had grown by 8.7 percent in the fourth quarter of 1999, bringing full year 1999 growth to 2.9 percent.

He said the government was forecasting economic growth of 5.0 percent for 2000.

Trading activity picked up strongly in the afternoon and turnover was a total HK$21.38 billion, up from on Tuesday's HK$19.60 billion. The finance sector led the market to its record, lifted by banking giant HSBC Holdings which closed up HK$2.50 or 2.92 percent at HK$88.00. The share was the most actively traded on heavy turnover of HK$1.59 billion.

Property shares also responded favourably to the budget proposals and economic forecasts.

Blue chip Sun Hung Kai Properties leaped HK$2.75 or 3.75 to HK$76.00.

"The budget address and the GDP numbers suggest that we are going to see an unwinding of precautionary savings and this is going to have a positive impact on the property market," Petch said.

The market's infatuation with tech stocks was undiminished, brokers said, but some favourites came in for profit-taking.

Pacific Century CyberWorks 1186.HK shed HK$0.45 to HK$23.85.

China Telecom fell for a second day, dropping HK$2.00 or 2.56 percent to HK$76.25. GEM newcomer tom.com fell HK$0.40 or 2.8 percent to HK$13.90.

Cathay Pacific, which is forecast to report a strong rebound in 1999 earnings, added HK$0.20 or 1.63 percent to close at HK$12.45.-Reuters