HONG KONG (XFN-ASIA) - Share prices finished the morning higher led by
banking giant HSBC, China financials and airlines, with lower oil prices and
easing worries over US credit markets aiding sentiment.
Firmer mainland bourses also helped the market hold up despite mounting
profit-taking pressure, which took the index to negative territory for a while.
China coal firms slumped after mainland authorities said they will tighten
controls on spot coal prices at major ports and distribution centers in a bid to
keep prices in line and ensure thermal coal supplies to power plants.
The Hang Seng index ended the morning up 130.98 points or 0.57 pct at
23,265.53, off a low of 23,062.62 and high of 23,330.89.
Turnover was 39.24 bln hkd.
"The market was a bit volatile today... after a rebound of 2,000 points in
six sessions. It is in consolidation and may see some profit-taking soon," said
Peter Lai, a director at DBS Vickers.
The benchmark index has gained 1,960 points or 9.26 pct over the past six
trading days as oil prices fell back from record highs.
Lai said the morning gains were mainly due to financials as investors
continue to seek out bargains after the sector was oversold in the last few
months.
A correction of about 600-700 points will not be surprising in the near
term, although the market could run up further after a pullback, he said.
"I remain positive over the market's performance in the current quarter...
The benchmark index may regain 24,000-25,000 next month with some encouraging
(corporate) results," Lai said.
He added that A-share markets on the mainland are also likely to perform
better next month as the government will try to support the bourses during the
Olympic games.
Among large caps, HSBC rose 1.50 hkd or 1.17 pct at 130.0, China Mobile was
up 0.30 hkd or 0.27 pct at 110.3, Hong Kong Exchanges up 3.8 hkd or 3.16 pct at
124.0 and China Life up 0.45 hkd or 1.48 pct at 30.85.
Hutchison Whampoa was up 0.35 hkd or 0.46 pct at 75.65 after news that its
unit Hutchison Port Holdings submitted the highest bid for a Greek port project.
A Hutchison Port-led consortium has offered a 3.11 bln euro bid to operate
the Thessaloniki container terminal Pier 6 in Greece, according to the
Thessaloniki Port Authority.
China financials were higher, with ICBC rising 0.08 hkd or 1.36 pct to 5.95,
Bank of Communications up 0.12 hkd or 1.19 pct at 10.18 and China Merchants Bank
up 0.80 hkd or 2.79 pct at 29.45.
BOC was up 0.03 hkd or 0.84 pct at 3.61 after the bank's president described
the lender's subprime exposure risks as "controllable".
Li Lihui made the comment yesterday when questioned by reporters over
exposure to troubled US mortgage financiers Fannie Mae or Freddie Mac
BOC, one of China's four main commercial banks, said earlier it had trimmed
its investments in subprime-related assets to 4.4 bln usd as of the end of
March, from the end-2007 level of 4.99 bln.
China Construction Bank (CCB) rose 0.08 hkd or 1.16 pct to 7.0, extending
yesterday's 3.44 pct gain. The bank's officials said reports which claimed the
lender may be holding some 7 bln usd worth of securities related to US mortgage
financing giants Fannie Mae and Freddie Mac as "groundless".
CLSA said in a research note that mainland lenders may have more than 30 bln
usd of exposure to Fannie Mae and Freddie Mac.
BOC's holdings may amount to 20 bln usd, or about 2.6 pct of total assets,
the highest among mainland banks, while CCB may hold 7 bln usd, or about 0.83
pct of total assets, the brokerage said.
"The subprime crisis has eased and I don't think this will be a major issue
going forward for institutions with exposures in US financial institutions,"
Poon said.
The US House of Representatives approved legislation last night to help
troubled Fannie Mae and Freddie Mac.
Among local banks, Bank of East Asia gained 0.30 hkd or 0.76 pct at 39.70
and BOC Hong Kong was up 0.42 hkd or 2.18 pct at 19.68 while Hang Seng Bank shed
0.60 hkd or 0.39 pct at 153.40.
In the property sector, Cheung Kong was flat at 111.0 hkd, Henderson Land up
0.05 hkd or 0.10 pct at 49.20 and Sino Land down 0.1 hkd or 0.6 pct at 16.6.
Oil refiner Sinopec up 0.09 hkd or 1.1 pct at 8.24 as crude fell more than
20 usd a barrel since last week, while upstream oil play CNOOC was down 0.22 hkd
or 1.85 pct at 11.70.
PetroChina -- which has both oil refining and production business -- was
down 0.10 hkd or 0.94 pct at 10.56.
Oil edged below 124 usd a barrel in Asian trade today after falling 3.98 usd
overnight.
Airlines extended their gains as fuel-cost worries eased. Cathay Pacific
rose 0.62 hkd or 3.96 pct at 16.26, Air China was up 0.22 hkd or 4.89 pct at
4.72 and China Southern Airlines added 0.39 hkd or 11.37 pct at 3.82.
China Eastern was up 0.18 hkd or 6.79 pct at 2.83. The carrier said it has
not been in talks with Shanghai Airlines over a merger.
China Eastern surged nearly 12 pct yesterday after a mainland media report
said the government is considering the possibility of a merger of the two
Shanghai-based carriers.
China coal firms were hit by news of tighter controls on spot coal prices.
China's National Development and Reform Commission said authorities will
step up efforts to ensure thermal coal prices do not exceed limits. Hoarding of
coal will be subject to punishment, it said.
China Shenhua lost 1.0 hkd or 3.05 pct at 31.8, China Coal was down 0.40 hkd
or 2.67 pct at 14.6, Yanzhou Coal lost 0.72 hkd or 4.80 pct at 14.28 and Hidili
Industry was down 0.48 hkd or 4.05 pct at 11.38.
Gold and other metals were weaker following a drop in commodity prices.
Zijin Mining was down 0.17 hkd or 2.46 pct at 6.74, Lingbao Gold was flat at
3.01 hkd and Zhaojin Mining was down 0.15 hkd or 1.61 pct at 9.19.
Among others metals plays, Jiangxi Copper was down 0.10 hkd or 0.66 pct at
15.16 and Chalco fell 0.05 hkd or 0.58 pct to 8.52.
The Hang Seng China Enterprises index was up 71.46 points or 0.56 pct at
12,921.22.
(1 usd = 7.8 hkd)
roby.lau@xfn.com
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