HONG KONG (Thomson Financial) - Hong Kong shares are expected to open
higher, led by financial companies, on easing credit worries and a further fall
in oil prices.
The U.S. House of Representatives passed legislation on Wednesday which aims
at helping strapped homeowners who are facing foreclosure, and preventing
troubled mortgage giants Fannie
Mae and Freddie Mac from going broke.
"There should be a bit of confidence in financials because of news the U.S.
Congress will help Fannie Mae and Freddie Mac," said Francis Lun, general
manager at Fulbright Securities.
"The index's rebound won't be as strong as yesterday's because there's bound
to be some profit-taking. But airlines and refining stocks should advance."
The Dow rose 0.3 percent by the close on Wednesday after rising nearly 100
points early in the session as a barrel of light, sweet crude fell $3.98 to
settle at $124.44 a barrel on the New York Mercantile Exchange.
Oil prices have dropped more than $20 a barrel since hitting a record above
$147 just weeks ago on worries among oil investors that high prices and a
sluggish economy are reducing demand, raising hopes for a sustained pullback in
oil prices.
Stocks to watch include Citic Resources Holdings, China Construction Bank,
and China Eastern.
Citic Resources Holdings, the resources unit of Chinese conglomerate Citic
Group, may be active on reports it plans a $10 billion offer for the coal gas
assets of Australia's Origin Energy.
The South China Morning Post reported Origin has started providing
information about the coal-bed methane assets to Citic and other interested
parties early this month.
China Construction Bank will be watched on reports the lender may buy a 20
percent stake in an Indonesian bank.
Construction Bank was eyeing a stake worth about 6.23 trillion rupiah in
Bank of Begara Indonesia, Indonesia's fourth-largest lender, according to local
media reports in Indonesia.
The reports said the bank is in talks with Indonesian government officials
regarding the possible acquisition.
China Eastern Airlines, which jumped more than 12 percent Wednesday, will
remain in focus on speculation it maight merge with smaller rival Shanghai
Airlines.
The mainland government is considering pushing for mergers in the industry
to boost effeciency in the sector.
leonora.walet@thomsonreuters.com
.
lw/nt
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