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HONG KONG, March 31 Hong Kong stocks fell 1.88
percent on Monday to post their worst quarterly performance in
more than six years, as investors took to the sidelines on
lingering concerns about the global credit crunch.
The benchmark Hang Seng Index .HSI fell 436.75 points to
close at 22,849.20 points. It fell more than 6 percent for the
month of March and was down 18 percent for the quarter.
"Today's correction was a healthy one and was within
predictions. There was no disappointment," said Patrick Yiu, an
associate director at CASH Asset Management, adding that local
stocks had also tracked softer mainland markets in late trade.
The China Enterprises Index of Hong Kong-listed mainland
companies .HSCE, or H shares, finished down 2.81 percent at
12,083.30, ending the first quarter down more than 25 percent and
the month of March about 13 percent lower.
China's main stock index Shanghai Composite Index .SSEC
slid 3 percent on Monday to end the first quarter with a loss of
34 percent, its biggest quarterly loss since 1992.
Mainboard turnover was HK$74.50 billion (US$9.55 billion)
compared with HK$97.54 billion on Friday.
Brokers said weakness in overseas and mainland markets had
weighed on the Hong Kong market.
"The market is expected to be more stable in the upcoming
quarter, with buying interest likely to be fuelled ahead of the
Beijing Olympics," Yiu said.
"But the underlying tone for the market may still be weak
because an uptrend has not been confirmed."
Shares in heavyweight China Mobile (0941.HK) led the fall on
Monday, falling 2.11 percent to HK$115.80. Insurer China Life
(2628.HK) plunged 4.29 percent to HK$26.75, while global lender
HSBC (0005.HK) fell 0.86 percent to HK$126.80.
Airline stocks rebounded on weaker oil prices, bucking the
broad market trend. Air China (0753.HK) climbed 2.5 percent,
China Southern (1055.HK) rose 2.01 percent, China Eastern
(0670.HK) gained 0.51 percent and Cathay Pacific (0293.HK) rose
New listing Solargiga Energy Holdings (0757.HK) failed to
excite the market, closing at HK$2.93, up just 0.3 percent from
its IPO price of HK$2.92. It raised about $127 million in an IPO
that was delayed and downsized amid weak markets.
Another new listing, aluminium profiles maker Xingfa
Aluminium Holdings (0098.HK), fell more than 7 percent to end at
HK$2.11 compared with its issue price of HK$2.28.
Brokers said the umimpressive performance suggested that
investors were still cautious on IPOs.
Shares of China Telecom (0728.HK) plunged 4.69 percent to
HK$4.88 after the larger of the country's two fixed-line service
providers said it had agreed to buy Beijing Telecom from its
state parent for 5.557 billion yuan ($792.3 million).
China Telecom posted a full-year net profit of 23.7 billion
yuan, compared with a consensus forecast of 24.26 billion yuan.
Shares of China Resources (0291.HK) rose 1.63 percent to
HK$25 after the beverage-to-ports conglomerate posted a 79
percent rise in full-year profit, thanks to strong retail and
beer sales, and gains from the sale of a unit.
Shares of small Hong Kong lender Wing Lung Bank (0096.HK),
whose two largest shareholders were considering a possible sale
of their holdings, outperformed to jump 14.81 percent to
HK$135.70 on expectations that talks on the sale of a controlling
stake would conclude soon.
Henderson Investment (0097.HK), which said last week that a
joint venture partner had expressed interest in buying some of
its assets, jumped 37.68 percent to HK$0.95.
Another bright spot was Jiangsu Expressway Co Ltd (0177.HK),
which saw its shares rise 4.63 percent to HK$7 after the Chinese
toll road operator posted a 40 percent rise in 2007 profit to
1.64 billion yuan.
Dongfang Electrical Corp (1072.HK) fell 6.8 percent after the
company said it would issue up to 65 million new A shares,
raising capital to fund part of its 3.96 billion yuan ($564.8
million) investment in power projects.
Shares of China Communications Services (0552.HK) lost 6.04
percent to HK$5.29. The company and a stakeholder, the National
Social Security Fund, were selling up to $249 million worth of
shares on Friday, according to a term sheet obtained by Reuters.
(Editing by Anne Marie Roantree)