Credit-card 'gift' lifts Hong Kong

BEIJING has been showering gifts upon its troubled territory of

Investors today reacted positively to the latest in a series of initiatives, which allows mainland Chinese visitors to use yuan-denominated credit cards in the former colony.

The relaxation, which came into effect yesterday, put a rocket under some retailers' shares as punters believed that Chinese tourists would be even more inclined to open their wallets and splurge with one more payment method open to them.

Blue-chip clothing retailer Esprit gained 25 cents to HK$24.60 while small cosmetics chain Sa Sa International did far better, surging 20 cents or 9.2% to HK$2.275.

Tourists from the rest of China are increasingly important to the Hong Kong economy. Alongside the debit-card reforms, Beijing has moved to make it easier for them to come to Hong Kong, allowing individual visits in addition to organised group tours.

China has been concerned that it should do what it can to aid the embattled administration of chief executive Tung Chee-hwa. Many Hong Kong locals see their government as incompetent, out of touch and partly responsible for tough economic conditions.

Among Beijing's more significant gifts was a limited form of free-trade agreement, allowing Hong Kong firms greater access to the Chinese economy in advance of the timetable mandated by the World Trade Organisation.

Emerging markets lender Standard Chartered, up 50 cents at HK$130, last week opted to incorporate its Hong Kong operations locally. Executives said the legal tweaking would yield tax benefits and allow it to profit from the trade deal concessions.

StanChart rival HSBC continued its recent retreat from a high of HK$126 that was seen as having been overdone, backtracking HK$1 to HK$120.50.

The wider market also had a softer tone, beset by profit-taking and caught by looming breaks that will rob it of direction.

Major US financial markets are shut today for Martin Luther King Jr Day, and Chinese New Year falls at the end of this week.

Developer Cheung Kong, which has benefited from a renaissance in property prices, was also clipped by profit-takers, sliding 25 cents to HK$71.75. Sun Hung Kai Properties held its ground at HK$71.75. The Hang Seng index dipped 41.28 points to 13,126.48.

Tech shares helped inject some vigour into Tokyo's Nikkei 225 Average amid expectations that earnings and demand in the sector are still on an upward curve.

Advantest, which makes chip-testing equipment, traded at 9120 yen, up 100, while chipmaker Tokyo Electron firmed 20 yen to 8260.

The Japanese currency's sharp reversal last week had a follow through effect on prices today. Sony jumped 130 yen or 3.4% to 4,310 on the dollar's fight back while Matsushita Electric Industrial put on 24 yen or 1.5% to 1,516. Nissan Motor also enjoyed the exporters' lift, rising 20 yen or 1.7% to 1,210 yen as the Nikkei closed 179.13 points ahead at 11,036.33.

South Korean heavyweight Samsung Electronics hit a record on the same enthusiasm for tech stocks that aided Japan. The chipmaker rose 13,000 won or 2.5% to 519,000. 'SEC's share price could cross 550,000 won over next few months,' said JP Morgan. The Korea Composite index pushed ahead 6.67 points to 854.62.