Hang Seng cheered by 2020 rate hopes

Business | Kevin Xu and Bloomberg 13 Dec 2019

The benchmark Hang Seng Index, once hit a two-week high in morning trading yesterday before closing 348.71 points higher at 26,994 points, after the Federal Reserve of the United States indicated there would be no interest rate hikes next year.

On Wednesday, the Federal Open Market Committee left interest rates unchanged and signaled it would stay on hold through 2020, keeping it on the sidelines in an election year while also opening the possibility it might buy short-term coupon-bearing securities to ease money-market strain.

"Our economic outlook remains a favorable one despite global developments and ongoing risks," Chairman Jerome Powell said in Washington following the decision.

All blue-chip stocks gained, except Sunny Optical Technology (2382), which inched down 0.14 percent to HK$139.3, and China Overseas Land & Investment (0688), which dipped 0.52 percent to HK$28.8 and became the biggest loser.

Macau-concept stocks advanced on the news that President Xi Jinping will visit Macau next week to announce a raft of new policies aimed at diversifying the city's casino-dependent economy into a financial center. Galaxy Entertainment (0027) climbed 4.53 percent to HK$54.2, becoming the best performer among blue chips. Sands China (1928) was up 2.45 percent to HK$37.65.

AAC Technologies (2018) rose 1.47 percent to HK$65.7.

Months of protests and a struggling local economy have hammered Hong Kong's property stocks but analysts are starting to see a silver lining in valuations.

A measure of developer shares in the world's most expensive real estate market has tumbled more than 20 percent from a high in April. That slide has them trading at 11 times estimated earnings for the next 12 months, which is near a record low hit in October. All but two of the 13 stocks on the MSCI Hong Kong property gauge rebounded on Thursday. New World Development (0017) rose 2.2 percent to HK$10.42, the most since mid-October, as the best performer.

In other news, the onshore yuan rose by 53 basis points yesterday to 7.0333 per US dollar, hitting a two-week high.

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