Company News

HK stocks fall on Chinese banks; China higher

 * Utilities buck Hong Kong's downward trend
 * China market rises as energy giants gain ground
 (Updates to midday)
 HONG KONG/SHANGHAI, Dec 30 (Reuters) - Hong Kong shares were
down 0.51 percent by midday Wednesday with Chinese banks and
insurers leading losses. China stocks rose on optimism over the
country's economic recovery and as energy giants gained.
 The benchmark Hang Seng Index .HSI extended early losses to
a fall of 109.96 points to 21,389.48 by the midday break. The
China Enterprises Index .HSCE of top locally listed mainland
Chinese stocks was down 1.49 percent at 12,456.56.
 "People were cautious and their confidence was weakened after
chief executive's comment on the Hong Kong economy," said Alfred
Chan, chief dealer at Cheer Pearl Investment.
 On Tuesday, Chief Executive Donald Tsang said in Beijing that
he was pessimistic about the pace of economic recovery in Hong
Kong and warned that the city might experience a "double dip" in
middle of next year and recovery might not proceed smoothly.
 Brokers said underlying sentiment was not that weak and
investors were advised to stay alert.
 Chinese insurers and banks were weak on concern over their
exposure to policy risk and further Chinese government measures
to temper asset bubbles. China Life 2628.HK fell 1.32 percent
to HK$37.35 and China Pacific Insurance 2601.HK was down 1.47
percent at HK$30.25.
 Bank of Communications 3328.HK shed 1.46 percent and ICBC
1398.HK fell 1.56 percent. Bank of Communications said it would
appoint an executive from ICBC to a senior position, as part of a
more general reshuffle of senior executives among China's largest
state-owned banks. [ID:nTOE5BT01U]
 China Construction Bank 0939.HK fell 1.52 percent to
HK$6.46. ING ING.AS will sell its 50 percent stake in Chinese
insurer Antai to China Construction Bank 601939.SS as part of
its ongoing restructuring programme. [ID:nLDE5BS09I]
 PetroChina 0857.HK was down 1.93 percent at HK$9.16 despite
Canada approving on Tuesday PetroChina's PTR.N bid for control
of two oil sands projects. The deal was scrutinised under
recently tightened rules for takeovers of strategic assets by
foreign state-controlled companies. [ID:nN29197881]
 Bucking the weak market, utilities rose as traders parked
their funds in the defensive sector. China Resources Power
0836.HK climbed 2.4 percent to a four-week high before settling
at HK$15.10, up 1.21 percent.
 CLP Holdings 0002.HK gained 0.19 percent and Hongkong
Electric 0006.HK was up 0.24 percent.
 Market turnover increased slightly to HK$24.08 billion ($3.1
billion) from midday Tuesday's HK$18.63 billion.
 Kaisa Group 1638.HK climbed 11.1 percent to a two-week high
of HK$3.10 before settling at HK$2.96, up 6.09 percent. The
Chinese developer said it would team up with
Shenzhen-headquartered Sino Life Insurance to explore investment
opportunities in commercial properties for five years.
 Chinese comb maker Carpenter Tan 0837.HK extended gains,
soaring 23.4 percent to a high of HK$4.85 before ending the
morning at HK$4.61, up 17.3 percent. On its Tuesday debut, the
stock jumped 52.3 percent from its issue price, the market's
third-best debut this year after Amber Energy 0090.HK and BBMG
 Geely Auto 0175.HK fell 0.97 percent to HK$4.10. Executive
director Lawrence Ang sold an aggregate four million Geely shares
at an average HK$4.365 and HK$4.435 each on Dec. 14 and 15,
respectively, according to a filing to the stock exchange.
 China's key stock index was up 1.05 percent by midday, led by
energy giants riding the global oil price rally of recent weeks,
while institutional investors indulged in window-dressing to
bolster their year-end performance.
 Upbeat expectations for economic recovery and corporate
earnings continued to support sentiment.
 The benchmark Shanghai Composite Index .SSEC ended the
morning at 3,245.325 points, extending a more than 2 percent gain
earlier in the week fuelled partly by a government pledge to
stick with its economic stimulus. [ID:nTOE5BR00F]
 Gaining Shanghai A shares prevailed over losers by 617 to 244
while turnover jumped to 80 billion yuan ($12 billion) from
Tuesday morning's 63 billion yuan.
 Asia's top refinery Sinopec Corp 600028.SS, one of the
morning's most actively traded stocks, rose 3.28 percent to 14.16
yuan, while China's top oil company PetroChina 601857.SS added
1.7 percent to 13.78 yuan.
 Oil prices have generally risen over the past two weeks on
cold U.S. weather and a fall in U.S. inventories, although they
traded lower on Wednesday, drifting away from $80 per barrel.
 "(Chinese) institutions typically buy in the final days of
the year to make the book value of their stock holdings look
better by the year-end," said a senior trader at a major Chinese
securities brokerage in Shanghai. "This year, they have a
particularly good reason for year-end window-dressing as most
investors are already bullish about the stock market's prospects
for the first quarter of next year."
 The official China Securities Journal on Wednesday quoted
analysts as forecasting that the key index might rise as high as
4,000 points next year, buoyed by China's economic recovery.
 The official Securities Times reported that new regulations
on calculating insurer earnings, due to take effect next year,
would give a boost to the company bottom lines.
 Ping An Insurance 601318.SS rose 3.17 percent to 54.00 yuan
while bigger rival China Life Insurance 601628.SS advanced 1.57
percent to 30.97 yuan.
 Fuyao Glass 600660.SS, China's top auto glass maker,
forecast on Wednesday that its earnings would jump more than 330
percent in 2009 from 2008, propelled by strong vehicle sales in
China, which replaced the United States as the world's largest
auto market this year.
 But Fuyao was down 1.75 percent at 14.56 yuan by midday under
heavy profit-taking pressure after more than tripling over the
past year, far outperforming the broad market on investor
optimism about China's auto industry.
 (Editing by Chris Lewis)