Hong Kong developers talk up real estate, China Citic surges 10%, Japan awaits rescue package
In Asia Friday China's Shanghai Composite Index rose 1.6%, closing at 3,317. In Hong Kong the Hang Seng fell 0.3% to end the day at 22,498 and in Japan the Nikkei Index closed at 10,023 -- a gain of 0.5%
In Hong Kong, influential property developers joined forces in putting a positive spin on the territory's growth potential as the chairman of Hang Lung Properties, Ronnie Chan, told Bloomberg that property was a "good bet." Earlier this week Henderson Land chairman Lee Shau-kee predicted a 10% rise in 2010 for the already overheated property market. Today Henderson Land (HLDVF) lost 2.3% and Hang Lung (HLPPY) gained 1.5% as investors contemplate whether prices are under control.
Other big movers on the Hong Kong exchange included Li & Fung (LFUGF), which supplies masses of clothes and toys to Wal-Mart and Target in the U.S, and fell 3.8% today. Brilliance China Automotive Holdings (CBAMF) tumbled 7.4% and information technology company Futong Technology Development Holdings soared 38% on its debut on the exchange.
In China, banks led gains with China Citic Bank (CHBJF) rising to its 10% daily maximum after an announcement that Spain's Banco Bilbao Vizcaya Argentaria will pay $1.51 billion to raise its stake in the bank to 15% in the hopes of boosting trade between the two countries. Bank of China (BACHY) rose 3.4% and Industrial & Commercial Bank of China (IDCBY) climbed 2.9%.
In Japan investors anxiously awaited news from the government, which said it planned to unveil a stimulus package that could total as much as $46 billion. But the ministerial meeting was unlikely to happen today as the country's political parties could not agree on the size of the package, according to CNBC. Meanwhile, a fall in the value of the yen prompted shares in companies dependent on overseas sales to rise. Canon (CAJ) posted a 2.8% gain and Sony (SNE) added 1.4%. Word was also out today that Sony's CEO Howard Stringer was hatching a new plan to stream Sony movies and music through devices like the company's PlayStation 3 in an effort to increase the company's revenue.
Meanwhile, major Japanese lender Takefuji (TAKAY) nosedived 9.4% as Moody's cut its credit rating to below "junk." According to Bloomberg, the lender has reported more than $8 billion in losses over the past 3 years and is now desperately offering to convert bonds into cash for a percentage of the value. Investors can only hope that a rescue package arrives soon.