HK stocks seen up, but China's Alibaba set to fall

HONG KONG, May 5 (Reuters) - Hong Kong stocks are expected to
rise on Monday, tracking regional gains, with mainland Chinese
financial stocks in focus after China eased rules for funds to
set up in Hong Kong.

But shares of China's top e-commerce firm Alibaba.com Ltd
(1688.HK: Quote, Profile, Research, Stock Buzz), in which U.S. internet firm Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) is a
key investor, are expected to fall after Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz)
abandoned its bid to buy Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) after it turned down
its offer to raise the price by $5 billion to $47.5 billion.

"Mainland insurance firms, such as China Life and Ping An,
will rise after China allows more companies to set up operations
in Hong Kong," said Fulbright Securities general manager Francis
Lun.

"But Alibaba will fall. It is over-priced anyway. It's a
stock that rises and falls very sharply."

The benchmark Hang Seng Index .HSI is likely to range from
26,100 to 26,600 for the day. It rose 1.89 percent to 26,241.02
on Friday.

The China Enterprises Index of Hong Kong-listed mainland
companies .HSCE, or H Shares, jumped 2.82 percent to end at
14,631.15.
----------------------MARKET SNAPSHOT @ 2356 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1413.9 0.32% 4.560
USD/JPY <JPY=> 105.41 0.16% 0.170
10-YR US TSY YLD <US10YT=RR> 3.8591 -- 0.002
SPOT GOLD <XAU=> 860.8 0.63% 5.350
US CRUDE CLc1 116.14 -0.15% -0.170
DOW JONES .DJI 13057.80 0.37% 47.80
ASIA ADRS .BKAS 167.00 1.24% 2.05
-------------------------------------------------------------

FACTORS TO WATCH:
* Nikkei .N225 closed for holiday [.T]
* U.S. stocks Jobs data lifts blue chips, Nasdaq dips on Sun [.N]
* STOCKS NEWS ASIA-Market factors, main events [STXNEWS/ASIA]
* Oil steadies above $116 after sharp rally [O/R]
* Dollar underpinned by Fed view, yen pressured [USD/]
* For upcoming Hong Kong events, click on [HK/DIARY]
* For Hong Kong press digest, click on [PRESS/HK]

STOCKS TO WATCH:

* The spotlight will be on Chinese e-commerce firm
Alibaba.com Ltd (1688.HK: Quote, Profile, Research, Stock Buzz), in which Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) has a
stake, after Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) walked away from its bid to
buy Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz). Microsoft's offer was for $33 a share,
but Yahoo would not lower its demand below $37, Microsoft Chief
Executive Steve Ballmer said. The software company initially bid
$31 per share for Yahoo more than three months ago.
[ID:nN04337053]

* Chinese retailer Maoye International Holdings (0848.HK: Quote, Profile, Research, Stock Buzz) is
is set to make its trading debut.

* China's stock market watchdog said on Sunday it had eased
rules governing fund management firms to allow more companies to
set up operations in Hong Kong.

The China Securities Regulatory Commission (CSRC) said fund
managers would be able to operate under the Mainland and Hong
Kong Closer Economic Partnership Arrangement, a move that Hong
Kong's Securities and Futures Commission (SFC) said would bring
more firms to Hong Kong. [ID:nHKG75683]

KEY HK ADR MOVERS (by % change)

China East Air (CEA.N: Quote, Profile, Research, Stock Buzz)(0670.HK: Quote, Profile, Research, Stock Buzz) +8.7

Sinopec Shanghai Petroleum (SHI.N: Quote, Profile, Research, Stock Buzz)(0338.HK: Quote, Profile, Research, Stock Buzz) +7.0

China South Air (ZNH.N: Quote, Profile, Research, Stock Buzz)(1055.HK: Quote, Profile, Research, Stock Buzz) +6.9

Huaneng Power (HNP.N: Quote, Profile, Research, Stock Buzz)(0902.HK: Quote, Profile, Research, Stock Buzz) +4.5

PetroChina (PTR.N: Quote, Profile, Research, Stock Buzz)(0857.HK: Quote, Profile, Research, Stock Buzz) +2.7
(US$1=HK$7.8)
(Reporting by Judy Hua; Editing by Anne Marie Roantree)