Bernanke Bolsters Confidence in Asia, Hong Kong Real Estate Rises on Land Auction
Hopeful words about the U.S. economy from Fed Chairman Ben Bernanke helped push stocks higher in Hong Kong and ease investor worries that a double-dip recession in the U.S. could further unsettle global markets. "My best guess is that we will have a continued recovery, but it won't feel terrific," he said last night.
Hong Kong-listed HSBC advanced 1%, Bank of Communications rallied 3.2%, and exporter Li & Fung rose 1.6%. Li & Fung's big U.S. clients include lower-priced shops like Wal-Mart and Target -- stores that shoppers still frequent when times are tough and places they spend even more when the economy's looking brighter.
A plot of land in Hong Kong's Ho Man Tin district in a residential area of Kowloon was auctioned off by the government today, selling to Sun Hung Kai Properties for HK$10.9 billion ($1.4 billion) -- much more than the HK$8.41 billion ($1.08 billion) estimate. Sun Hung Kai's shares surged 1.7% by the end of trading. Renewed confidence in the property sector sent other Hong Kong builders higher today with New World Development soaring 3.1%, China Overseas gaining 2.4% and Sino Land rising 2.1%. Henderson Land advanced 1.8% and Cheung Kong added 1.5%.
Gold miners were among today's winners with Real Gold jumping 4.9% and Zijin Mining rising 2.2%. Gold hit a new record today, according to Bloomberg, trading for as much as 1,251.75 per ounce.
Denway Motors rose 2.3% after Guangzhou Automobile offered an extra 25% to buy out the automaker. That would mean even more money would be paid out to Denway investors in exchange for their shares, says Bloomberg.
Foxconn's troubles continued today with shares tumbling a further 4.8%. Some say the high suicide rate at the Chinese plant that manufactures iPhones and iPads, as well as products for Dell and Hewlett-Packard, could be linked to generous insurance payouts to victims' families. Yesterday the company agreed to a pay hike for its employees, hoping to make endless overtime hours less of a necessity for those needing more cash.
In Japan, Softbank, the exclusive provider of 3G services for Apple's iPhone and iPad rallied 2.3%. The iPhone has become increasingly popular in Japan, despite the fact that users can't choose between service providers. Adding the iPad to the mix has pushed even more business Softbank's way.
Some Japanese auto companies made headway today. Isuzu rallied 4%, Nissan gained 1% after announcing that it's already received 6,000 pre-orders for its Leaf electric car, which won't even go on sale until December, according to Japan Today.
Economists are predicting that economic growth in China may decline 10% or 11% this quarter, according to Bloomberg, and today banks closed lower with China Merchants Bank tumbling 2.2%, Bank of China falling 1.1% and Industrial & Commercial Bank losing 0.5%.
But car sales in the People's Republic are still rising and today bets on carmakers paid off. Beiqi Foton Motor surged 1.8%, FAW Car rose 2% and SAIC, the largest manufacturer advanced 1.1%. For those Chinese now used to a new, more comfortable way of life, going back to bicycles is not in the cards.