HK stocks set to fall, Chinese banks under pressure

HONG KONG, Dec 10 (Reuters) - Hong Kong stocks are expected
to fall on Monday, with Chinese banking stocks, such as
Indusgtrial and Commercial Bank of China (1398.HK: Quote, Profile, Research, Stock Buzz), likely to
drop after China tightened monetary policy over the weekend.

"The (blue-chip) index will fall by about some 500 points to
the 28,300 level because of the aggressive move by the Chinese
government," said Francis Lun, general manager of Fulbright
Securities. "A-shares and Chinese financial and banking stocks
will be no doubt under pressure."

The benchmark Hang Seng Index .HSI closed down 2.42 percent
at 28,842.47 on Friday, and the China Enterprises index of H
shares .HSCE, or Hong Kong-listed shares in mainland companies,
fell 0.96 percent to 17,619.03.

China's central bank raised on Saturday the proportion of
deposits that banks must hold in reserve instead of lending out
by a full percentage point to a record 14.5 percent with effect
from Dec. 25.

The move was part of central government attempts to curb
inflation and prevent the economy from overheating.

It was the tenth increase this year in the bank reserve
ratio, but all the others have been by half a percentage point.
The People's Bank of China's move will lock up some 350 billion
yuan ($47 billion) with the move.

Brokers said they also expected limited upside for Hong Kong
property stocks after recent strong gains, spurred by
expectations for an interest rate cut at this week's U.S. Federal
Reserve meeting meeting.

New listing Dongyue Group Ltd (0189.HK: Quote, Profile, Research, Stock Buzz), a Chinese
refrigerants maker which raised US$144 million by pricing its
Hong Kong IPO towards the low end of an indicated range, is
expected to suffer from weak market sentiment on its trading
debut.

"It is likely to be hit in the weak market with the stock
highly likely diving below its issue price," Lun said.

STOCKS TO WATCH:

* Ping An Insurance (Group) (2318.HK: Quote, Profile, Research, Stock Buzz) said late on Sunday
that premium incomes of Ping An Life Insurance Co of China Ltd,
Ping An Property & Casualty Insurance Co of China Ltd, Ping An
Health Insurance Co of China Ltd, and Ping An Annuity Insurance
Co of China Ltd for the first 11 months of 2007 amounted to 71.91
billion yuan, 19.64 billion yuan, 2.31 million yuan and 75.03
million yuan respectively.
here

* Iran said China's Sinopec (0386.HK: Quote, Profile, Research, Stock Buzz) would invest around $2
billion under a deal signed on Sunday to develop the huge
Yadavaran oil field, the kind of energy deal the United States
has been trying to prevent. [ID:nHKG352884]

* Hong Kong-based watch maker and retailer Peace Mark Ltd
(0304.HK: Quote, Profile, Research, Stock Buzz) said late on Friday it will buy Singapore-based luxury
watch retailer Sincere Watch SWAT.SI(0444.HK: Quote, Profile, Research, Stock Buzz) in a deal that
values Sincere at S$530 million ($368 million). Peace Mark said
it will pay for the purchase with 80 percent in cash and 20
percent in new Peace Mark shares at HK$12.096 per share.
[ID:nL07892957]

* Hong Kong-listed Agile Property (3383.HK: Quote, Profile, Research, Stock Buzz) said late on
Friday it had bought four land sites in Huadu District in the
southern Chinese city of Guangzhou for 920 million yuan ($124.2
million) for developing into a community with schools and
commercial facilities. [ID:nHKG88102]

* State-controlled China Minmetals Nonferrous Metals Co and
Jiangxi Copper (600362.SS: Quote, Profile, Research, Stock Buzz)(0358.HK: Quote, Profile, Research, Stock Buzz) made an agreed cash bid for
Canadian miner Northern Peru Copper Corp NOC.TO for about
$US450 million, the latest in a push by Chinese firms to shop
abroad for key mining assets. [ID:nN06226570]

* China National Building Material Co Ltd (3323.HK: Quote, Profile, Research, Stock Buzz) said over
the weekend that it would buy the entire equity interests in
merchandise trading and commercial real estate leasing firm CNBM
Investment for 520 million yuan, a move to establish an
investment arm as part of the company's the long term development
strategy.
here

* China Rise International (0723.HK: Quote, Profile, Research, Stock Buzz) said over the weekend it
would buy an 80 percent stake in a magnesite mine in Haicheng
City in Liaoning Province for HK$1.83 billion, a deal to be
settled by issue of new shares, a promissory note and issue of
convertible note.
here

Chalco (2600.HK: Quote, Profile, Research, Stock Buzz) said late on Friday a proposed merger with
Baotou Aluminium Co Ltd was conditionally approved by China
Securities Regulatory Commission. The company said it would make
a further statement on the receipt of official approval
documents.
here

Huaneng Power International (0902.HK: Quote, Profile, Research, Stock Buzz) said late on Friday
that the China Securities Regulatory Commission had conditionally
approved its application for issue of up to 10 billion yuan worth
of bonds in the mainland, and the issue of a first tranche of 5
billion yuan worth of bonds.
here

FACTORS TO WATCH:
* Moves in Tokyo stocks seen limited, eyes on Fed [.T]
* US STOCKS-Wall St ends flat on oil, jobs; eyes on Fed [.N]
* STOCKS NEWS ASIA-Market factors, main events [STXNEWS/ASIA]
* Oil falls 2 pct to below $88, resuming steep slide [O/R]
* Payrolls data lifts dollar versus yen, Fed awaited [USD/]
* For upcoming Hong Kong events, click on [HK/DIARY]
* For Hong Kong press digest, click on [PRESS/HK]

KEY HK ADR MOVERS (by % change)

HSBC Holdings (HBC.N: Quote, Profile, Research, Stock Buzz)(0005.HK: Quote, Profile, Research, Stock Buzz) +0.75

Huaneng Power (HNP.N: Quote, Profile, Research, Stock Buzz)(0902.HK: Quote, Profile, Research, Stock Buzz) -0.77

PetroChina (PTR.N: Quote, Profile, Research, Stock Buzz)(0857.HK: Quote, Profile, Research, Stock Buzz) -1.30

Chalco (ACH.N: Quote, Profile, Research, Stock Buzz)(2600.HK: Quote, Profile, Research, Stock Buzz) -1.62

China Unicom (CHU.N: Quote, Profile, Research, Stock Buzz)(0762.HK: Quote, Profile, Research, Stock Buzz) -2.12
(US$1=HK$7.8)
(Reporting by Donny Kwok, editing by Dominic Whiting)