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HK stocks up, near 5-mth high; property plays, IPOs shine

Published 09/24/2010, 01:24 AM
Updated 09/24/2010, 01:28 AM

* Hang Seng Index edges up, near five-month high

* HSI poised for fourth successive weekly gain

* Local property shares rally, Cheung Kong at year high

* HSBC weighs amid management shake-up, but off low

* New listings make strong debuts; Magic Holdings up 38 pct (Updates to midday)

By Vikram S.Subhedar

HONG KONG, Sept 24 (Reuters) - Hong Kong shares edged higher on Friday morning, trading near a five month high, with local property plays extending their recent strong run and new issues posting solid debut gains.

The benchmark Hang Seng Index, which was flat for most of the morning session, received a boost shortly before the midday break. Tokyo shares turned positive as the yen slid amid talk of currency intervention by Japan's central bank.

By the midday trading break, the index was up 0.28 percent at 22,109.41, poised for a fourth successive weekly gain.

With the index up nearly 8 percent this month and trading in overbought territory with its relative strength index (RSI) above 71, the short-term upside could be limited.

"It looks like we're going to consolidate around these levels at the moment after a strong bounce this month," said Daniel So, an analyst at Sun Hung Kai Financial in Hong Kong, adding that local property shares would continue to outperform.

Local developers have rallied in recent sessions with the sector sub-index enjoying its best week this year, up 4 percent.

So said low interest rates and yuan appreciation, which make Hong Kong dollar-denominated assets cheaper for mainlanders, were likely to continue attracting funds into the local housing market.

Cheung Kong (Holdings) Ltd, controlled by billionaire Li Ka-shing, rose 1.9 percent to 52-week high, building on gains after a technical breakout above its October 2009 peak.

Hong Kong Exchanges & Clearing Ltd rose 2.4 percent, bringing its gains for the month to nearly 20 percent, as turnover recovered in September and IPO activity in Hong Kong picked up.

New listings had a strong day, indicating to positive investor sentiment.

Magic Holdings International Ltd rose as much as 38 percent on its trading debut. The company, a maker of Chinese facial masks, had said in a statement that its Hong Kong IPO was subscribed to 768 times and priced at the top of the indicative range.

Europe's largest lender HSBC Holdings Plc, which has a 15 percent weighting on the benchmark index, was down 0.5 percent, capping the Hang Seng Index's gains.

HSBC, which opened 1.4 percent lower, is in focus amid talk of a management shake-up, with the Financial Times saying Chief Executive Michael Geoghegan may step down by the end of the year. (Editing by Chris Lewis)

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