Index enters bull market territory and triggers fresh round of issues

Hang Lung Group unveiled plans yesterday to raise HK$10.9 billion for its property arm through a share placement, striking while the iron is hot after Hong Kong's benchmark stock index crossed into bull market territory.

The controlling shareholder of Hang Lung Properties said it would sell about 293.9 million shares in the developer and subscribe to an equal number of new ones, representing 7.05 per cent of its existing issued share capital. The proceeds will be earmarked for expansion in the mainland.

In other IPO news, Pearl Oriental Innovation and China Glass announced separate plans to tap the market for capital of more than HK$800 million between them. 'The whole market has gone up, the whole world market has gone up, and this will continue,' said Martin Marnick, a director at Anand Rathi in Hong Kong. 'So while the iron is hot, [companies] are going to be tapping the market now rather than later.'

Equity markets from Hong Kong to Hungary have risen over the past few months after the US central bank hinted that it would engage in another round of quantitative easing to jumpstart its economy. The Federal Reserve officially unveiled the programme this week, confirming speculation that loose liquidity conditions would prevail.

The Hang Seng Index has surged 21.1 per cent since the start of September, surpassing the threshold which market observers use to define a bull market. Locally-listed companies have capitalised on the late-year rally to sell shares at recent highs.

China Yurun Food Group announced on Thursday that it intended to raise HK$1.4 billion through a share placement and would use the proceeds to expand its capital position and production capacity.