(Bloomberg, Nov 29, 2006) Hong Kong's Hang Seng Index rallied, having yesterday posted its biggest points decline since the Sept. 11 terror attacks. Esprit Holdings Ltd. advanced on speculation gains in the euro will boost European revenue.

Developers rose on a newspaper report that Cheung Kong (Holdings) Ltd. and Sino Land Co. had raised prices in the areas where they yesterday successfully bid for government land.

The Hang Seng Index gained 141.40, or 0.8 percent, to 18,780.93 at the 4 p.m. close in Hong Kong. The rebound from yesterday's 565-point slide was held back after comments on inflation made by U.S. Federal Reserve Chairman Ben Bernanke heightened speculation a two-year run of interest-rate increases will resume.

``There are some investors who are trading on a broader long-term story, like China growth, and are in a `buy on weakness' mode,'' said Tim Leung, who helps manage $1 billion at IG Investments Ltd. in Hong Kong. ``The concern about inflation is valid. In the past six-to-12 months, we've been talking about the same topic. Have interest-rates peaked? Are they going to come down?''

Hong Kong's central bank typically adjusts rates in step with the Fed to preserve the local currency's peg to the dollar.

The Hang Seng China Enterprises Index, which tracks the so- called H shares of 37 mainland companies, climbed 3.3 percent to 8402.26, after sliding 4.5 percent yesterday. PetroChina Co. gained after oil rose to the highest in almost three weeks.

European Sales

Esprit, which sells its own brand of apparel and accessories, jumped HK$1.75, or 2.3 percent, to HK$79.45 after the euro rose to $1.3175, from $1.3142 in late Tokyo trading yesterday. It earlier touched $1.3217, the highest intraday level since March 22, 2005.

The company does about 85 percent of its business in Europe. Every 1 percent increase in the euro boosts earnings by 0.85 percent, Paul McKenzie, an analyst at CLSA Ltd., wrote in a report yesterday.

The Hang Seng Property Index, which tracks five developers, gained 1.2 percent. It fell 4.8 percent yesterday after Cheung Kong and Sino Land paid HK$5.18 billion ($666 million) for two separate sites, less than the median estimate of HK$5.4 billion of eight analysts surveyed by Bloomberg News.

Cheung Kong, Hong Kong's second-biggest developer by value, gained 60 cents, or 0.7 percent, to HK$91.15. The company raised prices at its Sausalito project in Ma On Shan by 8 percent, the Hong Kong-based, Chinese-language Ming Pao newspaper reported today. Cheung Kong yesterday paid HK$3.24 billion for a site in the same area.

Property Prices

Sino Land rose 26 cents, or 1.8 percent, to HK$14.42. The company raised the average price at its Mount Beacon project in Kowloon Tong by 15 percent, Ming Pao said. Sino Land yesterday bought a site in the same district for HK$1.94 billion.

Sun Hung Kai Properties Ltd., Hong Kong's largest developer, added 65 cents, or 0.8 percent, to HK$87.60. Hang Lung Properties Ltd., the city's fourth-largest real-estate company, gained 38 cents, or 2.3 percent, to HK$16.92.

PetroChina, China's largest oil producer, climbed 33 cents, or 3.6 percent, to HK$9.60 after yesterday's 4.6 percent slide. Cnooc Ltd., China's largest offshore oil company, rose 12 cents, or 1.8 percent, to HK$6.82. It fell 2.1 percent yesterday.

Crude futures yesterday rose 1.1 percent to $60.99 a barrel in New York, the highest since Nov. 9, on forecasts that most of the U.S. will be colder than normal next week, signaling increased demand for heating fuels.

``Some of the oil producing stocks will benefit from the higher oil prices,'' said Ben Kwong, head of research at KGI Asia Ltd. in Hong Kong. ``Some of those stocks that had a sharp drop yesterday may see a rebound.''

The following stocks rose or fell. Stock symbols are in brackets after company names.

Brilliance China Automotive Holdings Ltd. (1114 HK) added a cent, or 0.8 percent, to HK$1.27. The company, which makes cars in China with Bayerische Motoren Werke AG, said it agreed to export 158,000 Zhonghua brand sedans to Germany for the first time over the next five years.

Foxconn International Holdings Ltd. (2038 HK), which makes mobile-phone handsets for Nokia Ojy, fell 45 cents, or 1.8 percent, to HK$24.05. Nokia, the world's largest maker of mobile phones, said its wireless-network venture with Siemens AG and sales of cheaper handsets in Asia will slow profit growth.

Hong Kong Exchanges & Clearing Ltd. (388 HK), the manager of Asia's second-biggest stock market, gained 55 cents, or 0.8 percent, to HK$67.2. The company is considering a plan to introduce a climate exchange to trade environment-related derivates, the South China Morning Post reported, citing the head of the exchange.

Source:Bloomberg