Sept. 12 (Bloomberg) -- Hong Kong's Hang Seng Index rose to a record. Sun Hung Kai Properties Ltd. led developers higher on expectations falling borrowing costs will sustain demand for real estate.

``A lower interest-rate environment will give a short-term boost to developers as that helps property demand,'' said Pauline Dan, who helps manage $2.5 billion of assets at Manulife Asset Management in Hong Kong.

Hutchison Whampoa Ltd. jumped the most in two months after the London-based Times newspaper said the company has put its Italian mobile-phone unit up for sale. China Mobile Ltd. and China Resources Enterprise Ltd. rose after the mainland's retail sales grew at the fastest pace in three years. Cnooc Ltd. climbed to a record after crude oil prices advanced to a high.

The Hang Seng added 357.90, or 1.5 percent, to close at 24,310.14, surpassing the record close of 24,069.17 set Sept. 5. The Hang Seng China Enterprises Index, which tracks the so-called H shares of 43 mainland companies, rose 0.8 percent to 14,450.48.

Sun Hung Kai, Hong Kong's No. 1 property developer by market value, climbed HK$7.70, or 7.1 percent, to HK$116.70, its highest close on record. Cheung Kong (Holdings) Ltd., the second biggest, added HK$4.50, or 3.9 percent, to HK$119, its highest close since March 2000.

Hong Kong's overnight interbank offered rate fell 0.17 percentage point yesterday to 3.8 percent, its lowest since June 28. The drop may give lenders room to reduce interest rates on mortgages, helping spur demand for real estate.

Sun Hung Kai also rose after the South China Morning Post said Credit Suisse Group may seek to escape the high rents of Hong Kong's Central district by moving to the company's International Commerce Centre in Kowloon.

`Positive News'

Hutchison Whampoa, Hong Kong billionaire Li Ka-shing's biggest company, gained HK$4.65, or 6.2 percent, to HK$80.15, its biggest advance since July 6.

Hutchison Whampoa put 3 Italia SpA, its unprofitable Italian unit, up for sale and may do the same with 3 UK, the British subsidiary, the Times said today, without citing anyone. The company's Italian business could be worth 10 billion euros ($13.8 billion), the report said. Company spokesman Hans Leung declined to comment.

``It's positive news for them because if the sale really happens it will benefit Hutchison's cashflow,'' Manulife's Dan said.

Retail Sales

China Mobile, the world's largest mobile-phone operator by users, gained HK$1.50, or 1.5 percent, to HK$102.80. China Resources, a state-controlled retailing and distribution group, climbed 30 cents, or 1 percent, to HK$31.50.

China's retail sales climbed 17.1 percent to 711.7 billion yuan ($95 billion) in August, the statistics bureau said. That beat the 16.5 percent median estimate in a Bloomberg News survey of economists.

China's retail sales report ``is positive, especially for consumer stocks,'' Dan said. ``Consumption will continue to be strong given increasing disposable income. We've always liked the consumer sector.''

Cnooc, China's biggest offshore oil producer, added 32 cents, or 3.2 percent, to HK$10.24, the highest close since its February 2001 debut. PetroChina Co., the largest oil producer, climbed 18 cents, or 1.6 percent, to HK$11.36.

Crude oil futures rose 1 percent to $78.23 a barrel in New York yesterday, the highest close since trading began in 1983. The contract was recently at $78.20 in after-hours trading.

Thirty-one stocks on the 40-member Hang Seng Index advanced while seven dropped. September futures rose 1.8 percent to 24,328.

The following stocks rose or fell. Stock symbols are in brackets after company names.

Chi Cheung Investment Co. (112 HK), a Hong Kong developer, surged HK$2.24, or 76 percent, to HK$5.20. Chinese Estates Holdings Ltd. (127 HK), Hong Kong billionaire Joseph Lau's property developer, climbed 32 cents, or 2.8 percent, to HK$11.76. Both stocks resumed trading today after being suspended Aug. 30.

Chinese Estates may increase its controlling stake in Chi Cheung after the two companies agreed to sell properties to each other. Chinese Estates will sell real-estate projects in China and Macau to Chi Cheung for HK$10.45 billion ($1.34 billion), both companies said in a statement yesterday.

Foxconn International Holdings Ltd. (2038 HK), the world's biggest contract manufacturer of mobile phones, fell 79 cents, or 3.9 percent, to HK$19.46, the lowest close since August 2006. Foxconn said first-half profit rose 7.4 percent to $324 million. That missed the median estimate of $370 million in a Bloomberg survey of analysts.

Hang Seng Bank Ltd. (11 HK), a unit of HSBC Holdings Plc, climbed HK$4.90, or 3.9 percent, to HK$129.50, its highest close on record. Knight Vinke Asset Management told HSBC in a 10-page critique it should take full control of Hang Seng or at least move more senior managers to Hong Kong, the London-based Times reported.

Jiangxi Copper Co. (358 HK) added 64 cents, or 3.7 percent, to HK$17.84. China's second-largest producer of the metal won regulatory approval to sell as many as 290 million new shares, raising 4 billion yuan ($532 million) to fund capacity expansion. The China Securities Regulatory Commission approved the company's plan for a private sale of A shares, Jiangxi Copper said.

Link Real Estate Investment Trust (823 HK), Hong Kong's largest property trust, gained 38 cents, or 2.4 percent, to HK$16.52, its biggest gain since March 7.

Deutsche Bank AG raised its stake to 22.5 percent from 5.9 percent, according to a Hong Kong stock exchange filing, displacing Children's Investment Fund Management (UK) LLP as the biggest unit holder. Jason Collins, a Singapore-based spokesman for Deutsche Bank, declined to comment.

To contact the reporter on this story: Hanny Wan in Hong Kong at hwan3@bloomberg.net

Last Updated: September 12, 2007 05:13 EDT