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Hong Kong: Stocks edge up on Monday

Monday, May 29, 2017 - 16:32

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[HONG KONG] Hong Kong stocks edged up on Monday, on which China markets were closed, with mainland property shares aiding the rise on anticipation of strong home demand in smaller Chinese cities.

The blue chip Hang Seng index rose 0.2 per cent to 25,701.63 points, the highest close since July 3, 2015. The Hong Kong China Enterprises Index gained 0.4 per cent to 10,619.34.

China Evergrande Group Ltd led the surge in mainland property stocks after Morgan Stanley initiated coverage on the developer with "overweight".

The brokerage said it expects Evergrande's gearing to drop to 237 per cent by end-2017 from 432 per cent at December 2016 on introduction of strategic investors.

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The stock, whose share-price has tripled this year, soared nearly 23 per cent to a record close of HK$15.20.

Other mainland developers also shot up. Country Garden rose 9.4 per cent, Agile Group climbed 5.1 per cent and China Resources Land 2.0 per cent.

The Hong Kong property sector remained strong with the sub-index rising 1.04 per cent, ignoring Hong Kong banks'move over the weekend to increase mortgage rates.

Large commercial banks, including Standard Chartered , HSBC Holdings and Bank of China Hong Kong, said they would raise interest rates following the latest round of mortgage tightening measures by the city's de facto central bank.

Hong Kong financial markets will be closed for a holiday on Tuesday. Mainland markets will be closed again, and will reopen on Wednesday.

REUTERS

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