HK stocks set for cautious open; China PMI eyed

HONG KONG, Sept 1 (Reuters) - Hong Kong stocks are set to
open flat to slightly higher amid investor caution, with the key
index hovering near a support level and as an economic slowdown
tests corporate profits in the second half of the year.

Wall Street closed out a dismal August on a flat note on
Tuesday with the S&P 500 .SPX down nearly 5 percent for the
month, pressured by growing evidence economic recovery is
sputtering.

Hong Kong stocks fell 1 percent on Tuesday with the Hang Seng
Index .HSI closing slightly below a support level that had
limited losses in recent sessions.

Stocks are likely to receive a boost from a report that
China's official purchasing managers' index rose to 51.7 in
August from 51.2 in July as the focus shifts to China's
moderating economy.

In the region, Japan's Nikkei .N225 rose 0.5 percent while
South Korea's KOSPI .KS11 was up a percent.

STOCKS TO WATCH:

- Air China Ltd (0753.HK) said it had agreed to buy 15 Boeing
787-9 aircraft from Boeing Co (BA.N) for a basic price of $3.19
billion to expand fleet capacity. [ID:nTOE67U09C]

- Institutional demand for Industrial and Commercial Bank of
China Ltd's (1398.HK) 25 billion yuan ($3.67 billion) convertible
bond sale exceeded 2 trillion yuan, the China Securities Journal
reported on Wednesday, without citing sources. [ID:nTOE67U090]

- China Mobile Ltd (0941.HK) will hold a 20 percent stake in
Shanghai Pudong Development Bank Co Ltd (600000.SS) for five
years, longer than previously announced, because of Chinese
regulations, the country's largest mobile carrier said.
[ID:nTOE67U088]

- Taiwan's top financial regulator said on Tuesday that it
hoped American International group Inc (AIG.N) would continue to
run its Taiwan unit Nan Shan Life, after rejecting its $2.2
billion sale to China Strategic Holdings Ltd (0235.HK) and Hong
Kong financial firm Primus Financial. [ID:nTPV001911]

- China's Yuanba gas field, being developed by China
Petroleum & Chemical Corp (Sinopec) (0386.HK) may be similar in
size to the neighbouring Puguang field, China's second-biggest, a
Sinopec executive said on Tuesday. [ID:nTOE67U04T]

- Hong Kong sold a piece of land on Tuesday at a price that
was a third above forecasts, indicating that the Chinese
territory's property sector could still be frothy even after
cooling measures were announced weeks ago. Kerry Properties Ltd
(0683.HK) won the bid. [ID:nTOE67U06U]

- Sinopharm Group Co Ltd (1099.HK) said it would set up a
joint venture Sinopharm Excelsior in Shanghai with a total
investment of 1 billion yuan. The venture will be involved in the
acquisition of medical institutions, management of hospitals, and
medical advisory service. For statement click
here

- Yuexiu Property Co Ltd (0123.HK) said it would buy two lots
of land in Panyu, Guangzhou province for about 2.9 billion yuan
to increase its land bank. For statement click
here

- Sri Lanka has signed a $450 million deal with China
Merchants Holdings (International) Co Ltd (0144.HK) and local
conglomerate Aitken Spence Plc SPEN.CM to boost the Colombo
port's cargo-handling capacity, a official said on Tuesday.
[ID:nSGE67T0JS]

- Swedish carmaker Volvo Cars, owned by Chinese group Geely
Automobile Holdings Ltd (0175.HK), wants a bigger European
Investment Bank loan than previously planned -- 600 million euros
($758 million) rather than 500 million. [ID:nLDE67U0ZZ]

- China Pacific Insurance (2601.HK) is planning to invest 5
billion yuan ($735.3 million) in Shanghai Rural Commercial Bank's
(SRCB) private placement of shares, the Shanghai Securities News
reported on Wednesday. [ID:nTOE67U09D]
MARKET SUMMARY
* Wall St ends dismal month flat, semis slide [nN31261350]
* Yen rises to 4th straight monthly gain vs dollar [nN31239308]
* US oil slumps on economy, drops 8.9 pct in Aug [nSGE67U05X]
* Treasuries gain as Fed underscores economy risks [nN31259511]
(Reporting by Vikram S Subhedar, Editing by Chris Lewis)