Hong Kong shares close lower in thin trade

2007-12-27 02:30:34 AFP

HONG KONG, Dec 27, 2007 (AFP) - Hong Kong share prices closed 1.02 percent lower Thursday as investors locked in profits in mainland banks and some local property firms after a two-day Christmas break, dealers said.

They said heavyweight China Mobile also pressured the key index on worries that the impending restructuring of the telecom sector will impair the company's earnings potential.

Some futures-related activity ahead of the settlement Friday of December Hang Seng contracts also accounted for the local bourse's drop, they added.

The Hang Seng Index closed down 285.87 points at the day's low of 27,842.93, after hitting a high of 28,343.39. Turnover was low at 76.60 billion Hong Kong dollars (9.82 billion US).

"Trade was a bit volatile as investors with different vested interests pushed and pulled the market in opposite directions," said Sean Tsang, senior vice president at Polaris Securities.

"Some fund managers and hedge funds who want to window-dress their positions tried to push the market which explains big gains in early trade."

"But other investors with short positions deliberately tried to push down the index using stocks with heavy weightings, such as China Mobile," he said.

China Telecom and China Netcom posted sharp gains as comments by China's cabinet that 3G technology is ripe for commercialisation in the country fuelled hopes the two fixed-line operators will soon be allowed to enter the mobile phone business by taking over assets from China Unicom.

China Mobile was down on worries that its dominant position may be threatened by stronger rivals that will emerge from an industry restructuring.

The share fell 2.26 percent to 138.60.

China Telecom rose 6.26 percent at 6.28, China Netcom gained 3.44 percent at 24.05 and China Unicom was up 3.57 percent at 17.98.

Shanghai-based semiconductor firm SMIC surged over 12 percent to 0.83 after news that it entered into a deal with IBM to use the US firm's technology for some semiconductor products.

Xingye Copper International, a mainland producer of copper-based alloy plates and strips, gained 93.5 percent on its trading debut at 3.29 dollars. It opened at 1.85 dollars.

Large-caps were lower, with HSBC losing 0.75 percent at 131.60, Hutchison Whampoa down 1.75 percent at 87.10 and HKEx shedding 0.36 percent at 220.80.

Cheung Kong was down 0.21 percent at 141.50 and Sun Hung Kai was up 0.49 percent at 163.60.

Among local banks, Hang Seng Bank was down 0.49 percent at 16.170 and BOC Hong Kong fell 3.22 percent to 21.05.