STOCKWATCH: Swire Pacific higher on institutional buying

HONG KONG (AFX-ASIA) - Swire Pacific Ltd was higher in mid morning trade on institutional buying as the stock has been lagging behind the broader market for some time, dealers said.

	    They said investors remained upbeat about the company's fundamentals since rents of its major property developments, including Pacific Place and Taikoo place, have remained firm, while rents in the Central district have shown signs of falling.

	    At 11:32 am, Swire Pacific rose 1.20 to 44.90 hkd on trade of 1.76 mln shares, while the Hang Seng Index was up 193.04 points at 13,914.31 on turnover of 4.58 bln hkd.

	    Peter Lai, director with OCBC Securities, said the stock mainly attracted interest buying from institutional investors this morning.

	    Merrill Lynch and Morgan Stanley among others are said to pick up the stock.

	    "Swire Pacific is trading at a price/earnings multiple of about 18 times, making it a value stock to investors," Lai said.

	    Kim Eng Securities analyst Kenneth Chan said fundamentals of the company also played a factor behind the current gains.

	    Chan said the declines in rents in Hong Kong as a whole have imposed little impact on Swire Pacific.

	    "The company has two star developments, Pacific Place and Taikoo Place. Rents of the two developments have held up well, while rents in Central have been falling," Chan said.

	    He added that investors remain optimistic about the profitability of Swire Pacific.

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