STOCKWATCH: HK Electric, Cheung Kong Infrastructure higher after MSCI changes

HONG KONG (AFX-ASIA) - Shares of Hongkong Electric Holdings Ltd and Cheung Kong Infrastructure Holdings Ltd were higher after the two companies were included in the MSCI Hong Kong index, dealers said.

	    At 12:08 pm, Hongkong Electric was up 0.35 hkd at 28.20 hkd on volume of 1.09 mln shares, while Cheung Kong Infrastructure gained 0.10 at 13.05 on turnover of 1.01 mln shares.

	    Simon Tam, dealing manager with Sassoon Securities, said: "For those new entrants to the MSCI Hong Kong index, the rally was most obvious in Hongkong Electric and Cheung Kong Infrastructure, as their inclusion was sort of unexpected."

	    He said, however, profit-taking in the two stocks might occur in later sessions.

	    "Cheung Kong Infrastructure is currently trading at a P/E ratio of about 9 times. It is quite expensive. Its resistance level should be capped at around 13.00-14.00 hkd," Tam said.

	    For Hongkong Electric, Tam said the utility stock might see profit-taking if it trades above 30.00 hkd.

	    The rally in Amoy Properties was less impressive, as it has been outperforming the market for some time given its interest rate sensitive entity, following a number of interest rate cuts so far this year, dealers said.

	    "Amoy's P/E ratio was about 20 times. It is time to lock in profit," Tam said.

	    Amoy was up 0.20 at 8.50.

	    Trevor Cheung, head of research with Indosuez W I Carr, said he sees no surprises from the MSCI changes, as the changes were in line with MSCI's new formula with its adoption of a free-float calculation. 

	    "There were no major surprises. Most players should have adjusted their portfolio well ahead of the announcement over the weekend," Cheung said.

	    MTR was another utility company picked by the MSCI into the Hong Kong index, but its performance was not as exciting as widely expected, dealers said.

	    MTR was unchanged at 13.95.

	    Hong Kong Exchange had a similar story. It was also steady at 14.00.

	    Cheung Kong's re-inclusion into the index, however, has been heavily factored into its shares price previously, dealers said.

	    Cheung Kong was down 0.25 at 92.25.

Related stock : (NIL)