Property lift gives HK new hope

HONG Kong shares, like those in most other Asian centres, ended the week with a firmer tone as strong growth figures from the US fed the widespread belief that the economic recovery remains on track.

But locals had extra reasons for cheer, as macro-economic data for the territory also supported the case for the bulls, and the government made positive noises about what it might be able to do for the beleaguered property sector.

The Hang Seng rose 113.8 points to 10,248.6, aided by exporters and developers. Li & Fung, the garment trader that ships many of its lines to the US, rose 20 cents, or 1.8%, to HK$11.25. Johnson Electric, the world's top maker of micro-motors, picked up 10 cents, or 0.9%, to HK$10.70.

Among property plays, Sun Hung Kai Properties gained 90 cents, or 2%, to HK$47.20; Henderson Land Development put on 25 cents, or 1%, to HK$25.80; and Cheung Kong was 50 cents, or 1%, better at HK$51.75.

The property sector gains came after Housing Secretary Michael Suen said on Thursday that the new supply of homes - 79,000 in the coming years - was lower than in previous years. He also promised further support measures in October, although he remained vague as to what they might contain.

Property prices, commercial and residential, have fallen by more than 50% in the past five years as the territory's asset bubble burst with the onset of the regional financial crisis. They have yet to recover, saddling many home owners with negative equity.

HSBC, the global bank and the market's largest cap stock, gained 75 cents, or 0.8%, to HK$96.50. It reports half-year results on Monday. MTR Corp, which runs Hong Kong's Underground system, eased 10 cents, or 1%, to HK$9.15 after saying Sars clobbered its first-half performance. Net profit crashed 93% to HK$113m (£9m).

In Japan telecoms group KDDI rose 25,000 yen to 569,000 yen after very solid quarterly numbers, including encouraging take-up of its 'au' branded third-generation mobile phone service.

Canon, the office equipment and camera maker, fared less well despite also reporting good figures after the market's close on Thursday. Although it raised its full-year forecast by 10% to 263bn yen (£1.35bn), profit-takers moved in. The shares slipped 30 yen, or 0.5%, to 5770 yen. The Nikkei 225 rose 48.46 points to 9611.67, up by 0.51%.

Singapore shares were little changed, with the focus on the top banks. DBS Group, which reports first-half numbers later today, gained 20 cents, or 1.8%, to S$11.60. Rival United Overseas Bank, which will also turn in its figures, trod water at S$13.20.

Singapore Airlines was static at S$10.80 despite a buy note from ING. It maintained a S$12-a-share target, saying the flier was undervalued compared with average valuations over the past seven years. The Straits Times index fell 1.8 to 1557.1.

And signs of diplomatic progress to end the Korean peninsula's nuclear stand-off combined with the US growth data to buoy Seoul stocks. The Korea Composite climbed 12.04 points, or 1.7%, to 725.56. Tech bellwether Samsung Electronics rose 9500 won to 425,500 won, an advance of 2.3%.