HK stocks seen lower, China Mobile may fall

HONG KONG, May 26 (Reuters) - Hong Kong stock are expected to
fall on Monday, tracking weak overseas markets, as soaring oil
prices rekindle worries over inflation and its impact on global
economic growth.

Beijing kicked off a long-awaited restructuring in the
country's telecommunications sector last week and China Mobile
(0941.HK) is likely to see continued selling pressure on fears
that competition will intensify after the reshuffle, analysts
said.

Goldman Sachs cut its rating on China Mobile on Monday to
sell from neutral.

China Mobile looks to be heading into a uniquely unfavourable
regulatory regime, with policies like inter-operator roaming
seriously threatening its many advantages, the bank said.

Trading in other Chinese telecom stocks including China
Telecom (0728.HK), China Netcom 0906.HK and China Unicom
(0762.HK), has been suspended since Friday pending further
statements.

"The market is likely to fall 300 points today as record oil
prices will affect the world's economy," said Francis Lun,
general manager at Fulbright Securities.

But telecom gears manufacturer ZTE (0763.HK) and service
provider, China Communications Services Corp (0552.HK), could
rise on hopes that they will benefit from China's development of
high-speed third-generation mobile phone services following the
sector restructuring.

The benchmark Hang Seng index .HSI fell 1.3 percent to
24,714.07 on Friday.

The China Enterprises Index of Hong Kong-listed mainland
companies .HSCE, or H shares, also closed 1.3 percent lower at
13,636.41.
----------------------MARKET SNAPSHOT @ 0002 GMT ------------

INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1375.93 -1.32% -18.420
USD/JPY JPY= 103.16 -0.13% -0.130
10-YR US TSY YLD US10YT=RR 3.8501 -- 0.000
SPOT GOLD XAU= 925.8 0.17% 1.600
US CRUDE CLc1 132.36 0.13% 0.170
DOW JONES .DJI 12479.63 -1.16% -145.99
ASIA ADRS .BKAS 161.09 -1.90% -3.12
-------------------------------------------------------------

FACTORS TO WATCH:
* Nikkei down 1 pct as exporters drag on yen [.T]
* Record oil fuels markets' worst week in 3 months [.N]
* Asian shares seen falling on oil worries [STXNEWS/AS]
* Oil extends gains on supply concerns, weak dollar [O/R]
* Dollar eases towards 1-mth lows in thin trade [USD/]
* For upcoming Hong Kong events, click on [HK/DIARY]
* For Hong Kong press digest, click on [PRESS/HK]

STOCKS TO WATCH:

* Henderson Land's (0012.HK) chairman Lee Shau Kee confirmed
that he had lent HK$3 billion to Yeung Kwok Keung, chairman of
Country Garden (2007.HK), funding part of his purchase of a stake
in Hong Kong's Television Broadcasts (TVB) (0511.HK), Hong Kong's
Cable TV reported on Sunday.

* China Life Insurance (2628.HK) said it would inject 1.2
billion yuan in capital into its property and casualty insurance
unit China Life P&C Company, a move to strengthen the unit's
capital base to face the increasingly competitive environment in
the rapidly growing non-life insurance market. For details please
see
here

* China Mobile (0941.HK) said Wang Jianzhou remained as
president of the parent company, China Mobile Communications Corp
(CMCC), and vice secretary of CPC Committee following reform of
the structure of the telecommunications sector. For details
please see
here

* China Unicom (0762.HK) said it was in talks on the disposal
of its CDMA business to China Telecom Corp (0728.HK) and a merger
with China Netcom Group Corp. Trading in shares of the company
will remain suspended pending a further statement. For details
please see
here
(Editing by Anne Marie Roantree)