Sun Hung Kai Shines after HK Real Estate Auction

Shares closed mostly higher in Asia Monday. Japan's Nikkei 225 Index climbed 2.7% to 10,400 and Hong Kong's Hang Seng Index rose 2.4% to 20,377. In China, the Shanghai Composite Index lost 0.5% to 3,003 on its first day back in business after the Chinese New Year Holiday.In Hong Kong, property stocks swept the Hang Seng higher as the city was abuzz with news of apartment sales and land auctions. Sun Hung Kai Properties surged 2% after winning this year's first land auction in the territory. The developer paid a whopping HK$ 3.37 billion ($434 million) for a piece of land in Tseung Kwan O district, according to the South China Morning Post. This is an area across Victoria Harbor from Hong Kong Island, beyond Lion Rock Country Park and just before the beachfront communities of Clear Water Bay.

Sun Hung Kai was also in the spotlight over the weekend when about 120,000 people turned up to bid on some 900 apartments in its Yoho Midtown apartment in Yuen Long -- an area about an hour away from Hong Kong's central business district. Prices averaged HK$5,400 ($696) per square foot, according to Business Week, even though the buildings and the planned shopping center are still under construction and won't be finished until the end of the year. Property Week said that about 40 apartments that sold over the weekend were immediately put up for sale again, with prices listed at 20% above their original selling prices. One look at this rather unimpressive housing block should tell you that this buying frenzy just might indicate a bubble.

Mainland Chinese buyers were among the most enthusiastic buyers, helping to push prices higher in this already overheated market. But while the location may not appeal to those doing business in places like the Hong Kong Stock exchange or the grand HSBC tower located far away and across the harbor in Central, it's ideal for those heading across the border to the factories (and copycat handbag shopping mecca) of Shenzhen -- a mere 10 minute commute, not including the lines at passport control.

Other property shares also surged today: Henderson Land, renowned for selling super-high-priced luxury apartments skyrocketed 3.2%, Cheung Kong soared 2.6%, New World Development gained 2.4% and Hang Lung Property added 2.1%.

In Tokyo, electronics companies were among the best performers. Clarion, maker of electronics for the auto industry, climbed 4.3%, Sanyo Electric rose 3.6% and Sony advanced 3.4%. Camera-related shares closed higher: Canon surged 3.9%, Nikon gained 3.6% and Fujifilm added 3%. Semiconductor testing company Advantest Corp. racked up a 3.6% gain.

In China, banks closed lower with China Citic Bank retreating 1.7% and China Construction Bank losing 0.9%. Developers also closed lower: Poly Real Estate sank 1.7% and Gemdale declined 1.5%. While buyers in Hong Kong capped off their Chinese New Year holiday scrambling for a piece of the over-priced action, Chinese may be starting the year of the tiger with their purse strings pulled a little tighter.
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