Hong Kong's Bubbling Property Market Sends Shares Higher, Chalco Surges in China

In Asia Friday, China's Shanghai Composite Index rose 0.7% to 3,068 and Hong Kong's Hang Seng Index inched up 0.2% to close at 21,371. In Japan, the Nikkei 225 Index gained 0.8% to end the day at 10,825.

Hong Kong's real estate market just won't slow down, despite worldwide recession, increased taxes and other government measures to curb prices. According to data on the University of Hong Kong's website, prices for residential properties have risen 29.6% in the past year and 1.5% in the last month alone. Centaline's data shows that the price of apartments in the highly sought after Tregunter Tower, the tallest residential building in the world until 2001, have risen nearly 10 percent this month. Of course residents have easy access to the escalators that zig zag down into the financial district, as well as the Peak Tram that heads straight up to the Peak or straight down into Central. A modern four-bedroom flat in Tregunter Tower can be yours for HKD$38,000,000 ($4.9 million) -- of course your kitchen might look straight into your neighbor's bathroom.

Shares in most of the territory's property companies rose today: New World Development surged 2.2%, Shimao Property rose 1.2%, Cheung Kong advanced 1.1%, Hang Lung added 1%, and Glorious Property gained 0.6%.

Mining companies gained value today with Hong Kong-listed shares of Aluminum Corp. of China, or Chalco, rising 3.3% after its parent company agreed to buy a 45% stake in a Rio Tinto mine in Guinea, according to Bloomberg. In China, Chalco jumped to its 10% daily limit on the news. Other mining and metals companies also gained with
Yunnan Aluminium soaring 5%, Shandong Nanshan Aluminum climbing 3.4%, Yunnan Copper Industry gaining 2.7% and Jiangxi Copper rising 2.2%.

In Japan, exporters got a boost from a U.S. jobs report showing that there were 5,000 fewer first time unemployment claims last week. Hoping that would translate into higher sales of Japanese electronics, investors pushed shares in Sony, maker of the PS3, climbing 2.6%. Camera maker Canon rose 2.4% and Panasonic gained 2%. Among car exporters, Toyota scored a 2% hike, Honda surged 1.9%, Isuzu rose 1.3% and Suzuki advanced 1%.

Prices for commercial land in Japan has fallen to the lowest levels in more than 35 years, according to Bloomberg, with prices down 6.1% last year. With the recession and a limited available credit, cash-strapped buyers are not in the market for fancy new homes. Developers are suffering; Today Mitsubishi Estate tumbled 2% and Mitsui Fudosan slumped 1.8%. According to data from Japan's Ministry of Land, Infrastructure, Transport and Tourism, these prices are the lowest seen since they began collecting data in 1974.

Today UNY Co, which sells basic household products and lower end apparel, gained 3% and Seven & I, operator of 7-Eleven stores rose 2.3%. Although Seven & I's up-market Seibu Department stores may be struggling, low cost candy and chips must be selling fast.