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Hong Kong: Hong Kong blue-chip stocks ended little changed on Friday, November 19, but state-backed conglomerate China Resources suffered its biggest drop in five months after weak third-quarter results, Reuters revealed. The blue-chip Hang Seng Index lost 0.09 percent, or 12.14 points, to 13,787.68. Over the week, the index managed to rise by a mere 0.02 percent, and has gained 9.6 percent so far this year.

Turnover at HK$16.5 billion (US$2.1 billion), was slightly below Thursday's HK$19 billion. "It's mainly profit-taking, but the overall tone is still okay," said Alex Wong, research director at Rexcapital Asset Management, adding the index was still on track to test the psychologically important 14,000 level. "But right now, we have to test the downside support first. It looks to me like the downside correction still has some momentum, we may be due for another 100 points or so."

The index for China Enterprise stocks , better known as H-shares, slid 0.56 percent to 4,843.72, down from a 7-month high of 4,923.63 reached on Tuesday. Investors punished China Resources Enterprise, a state-backed conglomerate that makes beer and operates supermarkets, after it reported a 9.4 percent fall in third-quarter earnings late on Thursday. Its shares, which hit a 3-year high of HK$11.90 on Wednesday, fell 5.96 percent to HK$11.05.

The conglomerate said it made HK$337 million (US$43.2 million) in the three-month period, down from HK$372.02 million a year earlier as a loss in its textile business took the shine off its retailing recovery.

By contrast, Emperor (China Concept) Investments rocketed 176.28 percent to HK$21.55 after the company unveiled a plan to participate in a 300-room hotel with a casino project in Macau. With gambling hungry mainland China tourists pouring into Macau's mushrooming casinos, investors have been snapping up Macau-related stocks in expectations of strong growth potential.

Investors also snapped up shares in China Oilfield Services Ltd. (COSL), the drilling services unit of top China offshore oil firm CNOOC Ltd., on expectations it will continue to benefit from the exploration boom in China. Its shares ended up 7.95 percent at HK$2.375.

Elsewhere, China's Ping An Insurance (Group) Co. finished flat at HK$13.10, off its all-time high of HK$13.60 hit on Tuesday, after it said early on Friday that accumulated premium income at its two principal units totalled 54.28 billion yuan (US$6.55 billion) for the first 10 months of this year.

JP Morgan has initiated coverage of Ping An, China's No. 2 life underwriter, with an "overweight" recommendation and an end-2005 share price target of HK$16.60.


21 November, 2004