Hong Kong shares seen opening higher on telcos rebound
HONG KONG, June 4 (Reuters) - Hong Kong shares are expected to open higher on Wednesday, boosted by a rebound in Chinese telecom stocks after they fell sharply in the previous session.
Shares in China Unicom 0762.HK, China Netcom <0906.HK and China Telecom (0728.HK) posted double-digit falls on Tuesday following an announcement on an industry restructuring, as investors had locked in gains in the run-up to the shake-up.
A number of brokerage downgrades and post-restructuring profit worries also weighed on investor sentiment.
"The correction in telecom stocks was overdone yesterday, so we can expect a rebound there today. But the turnover of the mainboard is likely to be lower than Tuesday's HK$83.9 billion," said Francis Lun, general manager with Fulbright Securities.
The Hang Seng Index closed 1.8 percent lower on Tuesday.
Reports of likely losses at Lehman Brothers, which sent U.S. stocks lower on Tuesday, is expected to have a limited impact on shares of financial bellwether HSBC Holdings (0005.HK) but may slow the momentum on the local bourse.
STOCKS TO WATCH
* Small lenders in Hong Kong will be in focus again after Spain's second-largest bank, BBVA BBAVA.MC, said it would double its stake in Chinese bank CITIC and its Hong Kong-listed unit Citic International Financial Holdings (CIFH) 0183.HK. BBVA wil pay 800 million euros ($1.3 billion) to increase its holding in CIFH to 30 percent. CIFH will be delisted as a part of the deal.
* The CIFH deal follows China Merchants Bank's (3968.HK) acquisition of another local lender, Wing Lung Bank 0096.HK, adding to speculation that Wing Hang Bank (0302.HK), Chong Hing Bank (1111.HK) and Dah Sing Banking (2356.HK) may also be talking to potential suitors.
* Shares in China's largest air carrier by fleet size, China Southern Airlines (1055.HK) may rise on news that its subsidiary, Xiamen Airlines, has launched cross strait flights to Taiwan at the frequency of one per hour. Earlier flights between the mainland and Taiwan were routed through a third destination, given the strained relations between the two sides.
Cathay Pacific Airways (0293.HK) which has been a major benefactor of the lack of direct flights between Taiwan and China is seen losing a substantial revenue stream.
* China Southern and smaller rival China Eastern Airlines are also reported to be cutting down on loss-making long-haul international routes to reduce costs as they grapple with sky-high oil prices [ID:nSHA271014]
Yanzhou Coal (1171.HK), China's third-largest producer of the commodity, said it had settled 2008 term contracts to export half a million tonnes of coal at a price which is 92 percent higher than that of last year. The contract is expected to raise the company's 2008 revenues by 224.93 million yuan. ---------------MARKET SNAPSHOT @ 00:07 GMT ------------------
INSTRUMENT LAST PCT CHG NET CHG S&P 500 .SPX 1,377.65 -0.58% -8.020 USD/JPY JPY= 105.05 -0.12% -0.130 10-YR US TSY YLD US10YT=RR 3.900 -- 0.006 SPOT GOLD XAU= $879.70 -0.08% -0.700 US CRUDE CLc1 $124.30 0.01% -0.010 DOW JONES .DJI 12402.85 -0.81% -100.97 ASIA ADRS .BKAS 163.18 -0.84% -1.38 ------------------------------------------------------------
FACTORS TO WATCH: * Nikkei up 0.7 pct, exporters lifted by softer yen [.T] * US stocks-Credit concerns send market lower, Lehman drops [.N] * STOCKS NEWS ASIA-Market factors, main events [STXNEWS/ASIA] * Oil falls more than $3 as US Fed warns on inflation [O/R] * Dollar holds big gains after Berbanke warning [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) China Netcom CN.N(0906.HK) -13.36 China Unicom (CHU.N)(0762.HK) -12.81 China Telecom (CHA.N)(0728.HK) -11.42 Aluminum China (ACH.N)(2600.HK) -3.77 Huaneng Power (HNP.N)(0902.HK) -2.89 PetroChina (PTR.N)(0857.HK) -2.72
(Reporting by Parvathy Ullatil; Editing by Anne Marie Roantree)
