* HSI snaps six-week rally on doubts about US, China
* Huiyuan Juice soars on possibility of Coke tie-up
* ICBC drops ahead of share lock-in expiry
* ZTE drops on broker downgrades after earnings
(Updates to close)
By Parvathy Ullatil
HONG KONG, April 24 Hong Kong shares rose 0.3
percent on Friday, with Huiyuan Juice spiking on hopes of a
deal with Coca-Cola, but a run of six straight weekly gains
ended as doubts emerged about the health of the financial
sector and the pace of recovery in China.
Shares in China's top lender ICBC (1398.HK) dropped 2.5
percent on expectations of a sell-down of a strategic foreign
holding in bank when a big chunk of shares emerge from their
lock-in period on Tuesday. [ID:nHKG214642]
Goldman Sachs (GS.N), Allianz (ALVG.DE) and American
Express (AXP.N) can trade a part of their stakes in the world's
most valuable bank and many expect them to cash out, at least
The benchmark Hang Seng Index .HSI ended 44.39 points
higher at 15,258.85, but dropped 2.2 percent on week to end its
longest weekly winning run since late 2007.
It is still up 12.4 percent this month and 6 percent higher
than the beginning of the year.
Geoff Lewis, head of investment services in Hong Kong for
JP Morgan Asset Management, said the Hong Kong market "had run
ahead of itself a little bit," prompting the firm to switch to
a neutral weight on Hong Kong from an overweight within its
Turnover dropped to a two-and-a-half week low of HK$51.7
billion, suggesting the the market could struggle to extend its
recent rally, said analysts.
Daily average turnover so far in April has risen to HK$65
billion from under HK$45 billion in the first quarter of 2009,
helping bourse operator Hong Kong Exchanges & Clearing
(0388.HK) rise by as much as three-quarters since early March.
The stock added 1.8 percent on Friday.
HUIYUAN BACK IN FAVOUR
China Huiyuan Juice (1886.HK) briefly jumped more than 24
percent to a five-week high on Friday as news that Coca-Cola
(KO.N) was in informal talks with the company fuelled renewed
hopes for a possible tie-up between the firms. [ID:nHKG255060]
Shares in China's top juice maker hit HK$6.3 but retreated
to close at HK$5.74, up 13.4 percent. After Coke's buyout deal
was scuttled by Beijing in March, shares in the Chinese juice
maker had shed more than half their value.
"Coke has deep pockets, they have budgeted $2 billion for
this market and Huiyuan can benefit from Coke's ability to
spend heavily on marketing and advertising, its relatively
superior distribution network and the way it can push out new
products quickly," said Renee Tai, analyst with CIMB-GK
At the end of the day's trade, Huiyuan said it was unaware
of the source of news reports on its resumed discussion with
Coke and added it was "not in possession of any price-sensitive
Handset makers also outperformed, rising sharply for a
second straight day after Goldman Sachs raised its rating on
the stocks. The world's largest cellphone maker, Foxconn
International Holdings (2038.HK), vaulted 9.6 percent after the
brokerage upgraded the stock to neutral from sell on an
improved outlook from its customers Nokia and LG.
BYD Electronics (0285.HK), which was raised to a buy from
neutral, jumped 9.4 percent to HK$4.18.
The China Enterprises Index .HSCE of top mainland
companies gained 0.5 percent at 8,979.18.
Chinese telecom equipment maker ZTE (0763.HK) dropped 3.7
percent despite posting a 29 percent rise in first-quarter
earnings amid strong revenue growth and stable profit margins,
as analysts deemed the stock too expensive after its recent
HSBC downgraded the stock to neutral from overweight after
the stock rose over 250 percent from its November 2008 lows,
driven by a surge in capital expenditure by China's wireless
companies. Nomura cut the stock to neutral from buy, arguing
that the potential benefits of the increased capex spending was
already factored into ZTE's share price.
Gold miner Zijin Mining (2899.HK) rose 7.2 percent to
HK$6.23 after the price of the precious metal rallied to a
(Additional reporting by Dan Burns; Editing by Lincoln Feast)