Hong Kong developers talk up real estate, China Citic surges 10%, Japan awaits rescue package

In Asia Friday China's Shanghai Composite Index rose 1.6%, closing at 3,317. In Hong Kong the Hang Seng fell 0.3% to end the day at 22,498 and in Japan the Nikkei Index closed at 10,023 -- a gain of 0.5%

In Hong Kong, influential property developers joined forces in putting a positive spin on the territory's growth potential as the chairman of Hang Lung Properties, Ronnie Chan, told Bloomberg that property was a "good bet." Earlier this week Henderson Land chairman Lee Shau-kee predicted a 10% rise in 2010 for the already overheated property market. Today Henderson Land (HLDVF) lost 2.3% and Hang Lung (HLPPY) gained 1.5% as investors contemplate whether prices are under control.

So far this year property values have skyrocketed 30% and developers have petitioned the government to release more land for development. The rocky terrain of the small island is government-controlled, with administrators doling out leases for small parcels of land where engineers design tall towers to maximize the saleable space. Prices in Hong Kong have always swung broadly. During the outbreak of SARS, glamorous flats could be snapped up for 50% of their value.

Other big movers on the Hong Kong exchange included Li & Fung (LFUGF), which supplies masses of clothes and toys to Wal-Mart and Target in the U.S, and fell 3.8% today. Brilliance China Automotive Holdings (CBAMF) tumbled 7.4% and information technology company Futong Technology Development Holdings soared 38% on its debut on the exchange.

In China, banks led gains with China Citic Bank (CHBJF) rising to its 10% daily maximum after an announcement that Spain's Banco Bilbao Vizcaya Argentaria will pay $1.51 billion to raise its stake in the bank to 15% in the hopes of boosting trade between the two countries. Bank of China (BACHY) rose 3.4% and Industrial & Commercial Bank of China (IDCBY) climbed 2.9%.

In Japan investors anxiously awaited news from the government, which said it planned to unveil a stimulus package that could total as much as $46 billion. But the ministerial meeting was unlikely to happen today as the country's political parties could not agree on the size of the package, according to CNBC. Meanwhile, a fall in the value of the yen prompted shares in companies dependent on overseas sales to rise. Canon (CAJ) posted a 2.8% gain and Sony (SNE) added 1.4%. Word was also out today that Sony's CEO Howard Stringer was hatching a new plan to stream Sony movies and music through devices like the company's PlayStation 3 in an effort to increase the company's revenue.

Meanwhile, major Japanese lender Takefuji (TAKAY) nosedived 9.4% as Moody's cut its credit rating to below "junk." According to Bloomberg, the lender has reported more than $8 billion in losses over the past 3 years and is now desperately offering to convert bonds into cash for a percentage of the value. Investors can only hope that a rescue package arrives soon.

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