Hong Kong shares end morning sharply higher; HSBC up after 2006 results UPDATE HONG KONG (XFN-ASIA) - Share prices finished the morning session sharply higher, rebounding after yesterday's 4 pct drop as investors took note of mostly firmer regional markets including Tokyo and Shanghai, dealers said.
HSBC (Nachrichten/Aktienkurs) was up after its 2006 results came in largely in line with expectations and following overnight gains in its ADR prices.
The Hang Seng Index ended the morning up 295.54 points or 1.58 pct at 18,960.42, off a low of 18,876.62 and high of 18,992.38.
Turnover was 32.54 bln hkd.
'Panic selling of retail investors, a phenomenon that we saw in the market's meltdown yesterday, was noticeably absent today,' said Brook McConnel, president of South Ocean Management.
He said investors picked up blue chips and other stocks on the view that the US economy remains sound despite some concerns over the housing market.
McConnel added that gains on the Japanese and China bourses helped support sentiment.
But despite today's gains, many investors still remain on edge, he said, adding that it will take some time before stability returns to markets.
HSBC was up 2.80 hkd or 2.11 pct at 135.80 after announcing a 5 pct rise in 2006 pretax profit to 22.086 bln usd, as its Hong Kong unit Hongkong and Shanghai Banking Corp posted a net profit of 37.71 bln hkd, up 14.7 pct.
Dealers noted that the results did not provide negative surprises, with the net profit of 15.79 bln usd still very satisfactory considering a 10.6 bln usd hit for bad debts in its US mortgage business.
'Except for its US unit, everything went well with HSBC although the 2006 results were not really spectacular,' said Paul Lee, senior analyst at Tai Fook Securities.
He said that HSBC's problems with its US unit appear to be contained at the moment, but added that the bank may continue to face difficulties in that market in the coming months.
'The US housing market is still deteriorating. If housing prices continue to drop and if unemployment rises, HSBC's problems with its US unit may persist,' he said.
HSBC's unit Hang Seng Bank gained 1.70 hkd or 1.61 pct at 107.60 after announcing that its net profit for 2006 rose 6.1 pct to 12.04 bln hkd on the back of a robust performance by its personal financial services and commercial banking operations.
Among other local banks, Bank of East Asia was up 1.15 hkd or 2.86 pct at 41.40 and BOC Hong Kong up 0.42 hkd or 2.33 pct at 18.46.
Other blue chips were also mostly higher, with China Mobile up 1.10 hkd or 1.63 pct at 68.45, Hutchison Whampoa up 0.65 hkd or 0.90 pct at 73.05 and Swire Pacific up 0.65 hkd or 0.78 pct at 84.45.
Among China financials, China Construction Bank gained 0.15 hkd or 3.71 pct at 4.19, Bank of Communications was up 0.23 hkd or 3.27 pct at 7.26, ICBC up 0.20 hkd or 5.01 pct at 4.19 and China Merchants Bank up 0.40 hkd or 2.74 pct at 15.0.
Property stocks were mostly firmer, with Cheung Kong gaining 0.95 hkd or 1.06 pct at 90.45 and Sino Land up 0.33 hkd or 1.82 pct at 16.82, while Henderson Land was down 0.30 hkd or 0.70 pct at 42.75 and Wharf Holdings down 0.05 hkd or 0.19 pct at 26.90.
New World Development gained 0.36 hkd or 2.24 pct at 16.40 after it said it plans to spin-off its unit New World Department Store China for a listing in Hong Kong.
Sun Hung Kai Properties was up 0.30 hkd or 0.34 pct at 89.45 ahead of first-half to December results tomorrow.
The property sector sub-index ended the morning up 144.33 points or 0.65 pct at 22,467.43.
Pacific Basin gained 0.34 hkd or 6.20 pct at 5.82 on expectations that its earnings will improve this year after falling to 110.29 mln usd in 2006 from the year-earlier 147.14 mln.
Among other stocks, PetroChina was up 0.14 hkd or 1.62 pct at 8.77, Chalco up 0.21 hkd or 3.04 pct at 7.11, China Unicom up 0.07 hkd or 0.77 pct at 9.20 and China Cosco up 0.15 hkd or 2.48 pct at 6.20.
The Hang Seng China Enterprises index was up 232.46 points or 2.73 pct at 8,760.92.
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