HONG KONG (XFN-ASIA) - Share prices turned lower midmorning after early
gains driven by better-than-expected jobs and factory orders data in the US
Telecom stocks were mostly firmer after a report that an industry
restructuring on the mainland could kick off as early as this month.
Alibaba.com fell over 4 pct after Microsoft abandoned its bid for Yahoo,
with investors also cautious as the Chinese e-commerce firm will report its
first-quarter results tomorrow.
Maoye International Holdings, a mainland department store operator, turned
lower after opening slightly higher compared to its initial public offering
price on its trading debut here.
At 11:30 am, the Hang Seng index was down 43.85 points or 0.17 pct at
26,197.17, off a low of 26,187.01 and high of 26,387.37.
Turnover was 28.66 bln hkd.
"The overall backdrop on Wall Street and other markets is positive," said
Dennis Poon, research head at South China Securities.
"However, we made big gains last month" and profit-taking pressure is bound
to arise, he said.
The key index gained 12.7 pct last month.
Data released Friday showed US employers cut 20,000 jobs in April, fewer
than the 75,000 that economists had expected, while factory orders in March rose
1.4 pct after declines in the previous two months.
China telecom stocks were mostly higher after the South China Morning Post
reported that an industry restructuring on the mainland may start as early as
the 17th of this month.
China Unicom Ltd chairman Chang Xiaobing may be appointed as China Mobile's
next chief executive as part of the restructuring, it said.
China Unicom gained 0.28 hkd or 1.65 pct at 17.26, China Telecom was up 0.03
hkd or 0.56 pct at 5.42 and China Netcom rose 0.35 hkd or 1.62 pct to 25.15,
while China Mobile lost 0.60 hkd or 0.44 pct at 135.50 on profit-taking after
recent gains.
Poon said "it's understandable for China telecom counters to attract buying
interest as we get more news about the proposed restructuring in the sector."
"However, we've getting all sorts of rumors over the past year or so and
there is still no definite date when the restructuring will actually start. I
won't be surprised if some investors take profit later after accumulating gains
from trade on those rumors," he said.
Among large-caps, HSBC was up 0.20 hkd or 0.15 pct at 136.50, HKEx lost 0.10
hkd or 0.06 pct at 166.40, China Life was up 0.20 hkd or 0.43 pct at 35.35 and
Hutchison Whampoa added 0.10 hkd or 0.13 pct at 76.80.
"HSBC has steadily gained over the past few weeks on buying by institutional
investors. I expect this trend to continue near term," Poon said.
China financials were mostly lower after early gains, with ICBC losing 0.04
hkd or 0.64 pct at 6.25, China Construction Bank down 0.02 hkd or 0.28 pct at
7.17, Bank of China up 0.01 hkd or 0.25 pct at 4.07 and Bank of Communications
flat at 11.46 hkd.
Oil producers were mostly higher after crude prices rose sharply on Friday.
CNOOC was up 0.24 hkd or 1.8 pct at 13.60 and PetroChina rose 0.08 hkd or
0.66 pct at 12.16, while refiner Sinopec was down 0.15 hkd or 1.73 pct at 8.54.
Gold miners were mostly higher, with Zijin Mining up 0.05 hkd or 0.71 pct at
7.13, Zhaojin Mining up 0.30 hkd or 2.55 pct at 12.06 and Sino Gold up 0.95 hkd
or 2.61 pct at 37.40.
Properties were mostly higher despite local banks' decision not to follow
the US Federal Reserve and the Hong Kong Monetary Authority's moves to cut key
interest rates.
Cheung Kong rose 1.40 hkd or 1.12 pct to 125.90, Sun Hung Kai was up 1.50
hkd or 1.07 pct at 142, Sino Land was up 0.35 hkd or 1.63 pct at 21.85, Wharf up
0.10 hkd or 0.25 pct at 39.80 and New World up 0.15 hkd or 0.7 pct at 21.55.
The property sub-index rose 148.11 points or 0.45 pct at 33.303.67.
"Interest rates in Hong Kong are now at low levels and most expect these
rates to remain virtually unchanged for at least a year," said Poon.
Among local banks, Hang Seng Bank was up 0.70 hkd or 0.44 pct at 159.60,
Bank of East Asia down 0.25 hkd or 0.56 pct at 44.10 and BOC Hong Kong flat at
20.50 hkd.
Standard Chartered was down 1.60 hkd or 0.56 pct at 283.40 after news that
it raised its stake in Asia Commercial Bank in Vietnam to 15.86 pct from 8.76
pct.
Alibaba.com lost 0.76 hkd or 4.69 pct at 15.42 following news that Microsoft
has dropped its takeover bid for Yahoo.
Dealers noted that Alibaba.com made hefty gains earlier this year after news
of the Microsoft bid for Yahoo, amid hopes that a successful Microsoft-Yahoo
deal might eventually fuel a similar takeover interest in the mainland internet
firm.
Yahoo owns 39 pct of Alibaba Group, Alibaba.com's parent. Alibaba.com is due
to report its first quarter results tomorrow.
Among other internet firms, Tom Group was up 0.01 hkd or 2.08 pct at 0.49
and Tencent was 0.80 hkd or 1.43 pct higher at 56.85.
Maoye International was at 2.98 hkd, down 3.87 pct from its IPO price of
3.10 hkd.The mainland department store operator issued 862 mln shares at 3.10
per share in its IPO, raising 2.67 bln hkd.
"Compared to its mainland peers, its share price is expensive," said South
China Securities' Poon.
(1 usd = 7.8 hkd)
jun.concepcion@xfn.com
jc/rc
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