Hang Seng edges higher on property sentiment

Shopping district of Tsim Sha Tsui in Hong Kong, China
Source: Bloomberg

The city’s real estate sub-index hit a 14-month high yesterday, after gaining more than 27% since its lows in March.

Among the reasons for the stronger sentiment has been due to investors getting more bullish on property players reporting a solid first half earnings, a raft of analyst upgrades and less bearish forecasts on home prices for 2014.

So far, there have been some positive signs, prices have climbed about 4% since the start of June, according to data from Centaline.

Some of the property players leading gains this week include Cheung Kong Holdings and Sun Hung Kai Properties.

Cheung Kong Holdings has been on a good run over the past seven days and it looks set to test its all-time high level of HK$159.50 in 2007. Reporting of its earnings is due to be released later today, and any positive surprises will be further upside, but otherwise there could be some profit-taking in the interim.

We’ll also get some signs of how the economy is faring with Hong Kong’s retail sales figures for June out in the afternoon. The market consensus is expecting a slight pullback from the previous month.

There’ll be few other market catalysts in the Asian trading session today. Although, as we head into the last day of trading for the month, we can expect some support from window dressing activity to help the Hang Seng Index touch a fresh high.

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