STOCKWATCH: Wharf sharply higher on positive rental income outlook

HONG KONG (AFX-ASIA) - Wharf (Holdings) Ltd was sharply higher, outperforming the property sector and the overall market, on expectations that the company will benefit from a continued increase in rental income, in particular for Grade A office space, dealers said.	    At 11:23 am, Wharf was up 0.80 hkd or 3.95 pct at 21.05 hkd on volume of 2.02 mln shares, while the Hang Seng property sub-index was down 7.29 points at 17,105.74.	    The Hang Seng index was up 38.95 points at 12,989.44 on turnover of 2.82 bln hkd.	    Eric Yuen, research manager with Dao Heng Securities, said he expects Wharf will see annual rental income increase by close to 10 pct this year and next.	    "While its 2000 results were in line with market expectations, investors are looking at the possibility of a further increase in rental income over the next two years," Yuen said.	    With a recovery in rental rates in the local market and Wharf's expansion in its investment property portfolio, "I expect Wharf will record an increase of 7-10 pct in rental income this year and next year," Yuen said.	    Wharf posted 2.48 bln hkd in 2000 net profit, compared with 3.51 bln hkd a year earlier.	    The company said its property investment division recorded operating profit of 2.42 bln hkd in 2000, compared with 2.53 bln hkd in 1999.	    Yuen said rentals are still on the rise after the rebound in 2000.	    "Wharf's tenants who signed their contracts three years ago are expected to renew the contracts with the company this year. We expect the new contracts will contain better terms for Wharf," Yuen said. 

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