Hang Seng Index went up 127.08 points to 21,678.80, as Hutchison and Cheung Kong beat the cautious sentiment over the nonfarm payrolls report. The duo contributed about 50% of Hang Seng’s gains after both showed strong 1H10 earnings.
Hutchison Whampoa said that its 1H net profit to have increased to HK$6.45 billion, higher than market’s expectations of HK$4.51 billion. Its 3G business which was doubted earlier, made a positive contribution. HW’s shares leapt 9.7% to HK$58.20. CLSA raised HW’s target to HK$64 from HK$60.
Cheung Kong Holdings, Li Ka-shing’s property flagship which is HW’s largest shareholder, also went up 3.9% to HK$100.4 after announcing a 4% increase in 1H profit of HK$11.92 billion. HW’s performance and its property sales were the major contributors to the positive results. Goldman Sachs upped CK’s target to HK$110 from HK$107.
In the property sector, Sun Hung Kai Properties would sell 81 homes at Larvotto at HK$13,478 per square foot on average as soon as Wednesday. At the Ap Lei Chau project, four Tower 2 units are priced at HK$17,236 to HK$21,055 psf. Since July, more than 500 homes at Larvotto had been sold for a total of HK$12.5 billion, and SHKP is seen to keep hiking prices at Larvotto.
Other winner on Friday was The Bank of East Asia which settled at 2.78% higher at HK$31.45.
On the ratings front, Swire Pacific was raised to HK$100.40 vs. HK$90.00 by Citi, while Deutsche Bank raised SP to HK$103 from HK$98. JP Morgan set target at HK$115.80 vs. earlier HK$98.41 with Overweight rating vs. the previous Neutral. BofA-ML upped SP to Neutral from Underperform and saw target raised to HK$102 from HK$91. Only Morgan Stanley downgraded the rating ti Equal-Weight from Overweight. Cathay Pacific was raised by Deutsche Bank to be at HK$23.20 vs. prior HK$19.60.
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