By Laauren Cooper www.dailyfinance.com
Shares had a mixed day in Asia Tuesday. Hong Kong’s Hang Seng Index climbed 1.2%, ending the day at 20,623, and China’s Shanghai Composite Index slumped 0.7% to 2,983. In Japan, the Nikkei 225 Index slid 0.5% to 10,352.
While most shares declined in Tokyo, news reports that Dubai’s government has allocated 18.3 billion dirhams ($5 billion) to help keep Dubai World afloat while it sorts out issues with creditors, sent shares of several engineering companies involved in the building of the Dubai Metro surging.
The consortium of builders called Dubai Rail Link or DURL includes Kajima Corp., which surged 4.4% today, Obayashi Corp, which rose 2.3%, and Mitsubishi Heavy Industry, which advanced 1.5%. Mitsubishi Corp., also a consortium member, fell 0.9%. But according to Bloomberg, this bailout is not a new arrangement.
The DURL consortium was also helped by news that it has reached a settlement over outstanding payments of up to $3 billion. Work has now resumed on the impressive Dubai Metro. It had slowed to a snail’s pace when the dispute over payments erupted, just after the opening of the grand station at the $1.5 billion Burj Khalifa. According to the Financial Times, the outstanding payments will be paid over several years.
DURL is now back at work on the remaining 36 stations and the state-of-the-art system, which is fully automated with no human driver. Carriages are all air conditioned, helping to make life bearable in the desert land, and when completed the system will become the longest automated metro network in the world.
Also in Tokyo, shares in Toyota parts supplier JTekt plunged 6.6%. JTekt makes the steering systems for the Corolla, which may join the long list of recalled Toyota vehicles. Toyota (TM) fell 0.5%.
In China, insurers were among stocks that closed lower: Ping An tumbled 8.9% after announcing that investors will soon be able to trade shares that are coming to the end of their lockup period, says Bloomberg. China Life Insurance fell 3.1%.
In Hong Kong, Sun Hung Kai Properties continued to climb, soaring 3.4%. Yesterday the company won the first land auction of the year, buying a chunk of undeveloped land in Tseung Kwan O, and further stoking the property mania that has gripped Hong Kong Residents. It also attracted more than 120,000 potential buyers to the sale of 900 apartments in the Yoho Midtown housing estate in Yuen Long. Tiny apartments, some reportedly as small as 400 square feet, were snapped up on the spot.
Other Hong Kong developers also gained: Henderson Land rose 4.2%, New World Development advanced 1.9%, Hang Lung and Cheung Kong both added 1%. On an island mostly made of jagged rock where development looks nearly impossible, an affordable home may still seem like a scarce and valuable commodity.