HK shares to rise on Wall St gains, China support

HONG KONG, May 11 (Reuters) - Hong Kong shares are expected
to open higher on Monday, with sentiment buoyed by Wall Street's
gains on Friday and hopes of more investment flows from mainland
China.

Banks and securities stocks may benefit from the latest
Chinese support measures for Hong Kong, including the relaxation
of requirements for branch expansions in Guangdong province.

"This morning the market will remain upbeat and will continue
to rise. Support will be coming from two sides -- Wall Street and
China, with the economic cooperation measures being
strengthened," said Francis Lun, general manager at Fulbright
Securities.

Under the sixth supplement to the mainland and Hong Closer
Economic Partnership Arrangement (CEPA) signed at the weekend,
Hong Kong commercial banks can set up service points in other
administrative areas without first establising a branch there.

Hong Kong securities firms and mainland securities firms may
also set up joint ventures in Guangdong province to provide
securities investment advisory services, with Hong Kong companies
allowed to hold up to one-third of the total shareholding of the
venture.

The benchmark Hang Seng Index .HSI on Friday closed up 1
percent or 171.98 points at 17,839.87, a seven-month high.
Turnover remained firm at HK$86.8 billion, although it eased from
Thursday's HK$95.2 billion.

STOCKS TO WATCH

* HSBC Holdings (0005.HK) is expected on Monday to announce
first-quarter results that show a widened net loss year-on-year
for its U.S. unit HSBC Finance Corp.

* Merrill Lynch reportedly quoted the management of Shanghai
Industrial Holdings (0363.HK) as saying the company would
complete a restructuring of non-core operations that would bring
in 3 billion yuan ($439.9 million) in cash.

* Bank of America (BAC.N) is expected to place its shares in
China Construction Bank (601939.SS) this week. However, sources
close to the deal said the likely buyer may not wish to take as
big a chunk as before because CCB's share price has jumped.

* The market will be looking closely at the written judgment
by the Court of Appeal on the PCCW (0008.HK) privatisation case
for indications of what is and is not allowed in the process of
taking a company private.

* China CITIC Bank (0998.HK) on Sunday said it would buy
70.32 percent of CITIC International Financial Holdings Ltd from
controlling shareholder CITIC Group for HK$13.56 billion cash.
BBVA will remain a minority shareholder in CITIC International
Financial. [ID:nSEO174054]. For statement please click
here
* Chinese property developer Greentown China Holdings
(3900.HK) late on Friday said it would buy property company
Skymoon International from a third party for HK$610 million, a
move to enhance the company to further participate in property
development in Beijing. The deal is to be settled by an issue of
new shares at HK$6.10 each. For statement please click
here
* Tsingtao Brewery (0168.HK) late on Friday said
Anheuser-Bush InBev S.A. INTB.BR had on May 8 agreed to sell
91.64 million H-shares, or 7.01 percent of total issued share
capital, of Tsingtao at US$2.5685 each for US$235 million.
[ID:nWEA1179]. For statement please click
here
(Reporting by Nerilyn Tenorio; Editing by Chris Lewis)