Hong Kong stocks edged higher in thin trade on Monday as investors awaited fresh details on large upcoming China-related IPOs, although China plays sagged on weaker oil prices. "No one wants to go into the secondary market at the moment. Bank of Communications has started subscriptions and there is a lot of interest," said Herbert Lau, chief investment officer at CASH Asset Management.
The blue chip Hang Seng Index ended 0.12 percent, or 17.26 points higher, at 13,952.02. Volume was below recent averages with HK$9.8 billion (US$1.25 billion) worth of shares changing hands.
A rash of fresh China IPOs worth up to US$8 billion have pushed investors to the sidelines for the past few weeks as dealers gauge demand for China plays ranging from banks to raw materials.
Bank of Communications, China's fifth largest lender, is due to start trade in Hong Kong before the end of the month.
Order books have also opened for shipper China COSCO Holdings' US$1.7 billion IPO. China's largest coal producer China Shenhua Energy near US$3 billion IPO starts trade on Wednesday after receiving a lukewarm reception from investors.
But some analysts don't expect the market to gain momentum when the new shares start trading. They said the IPOs provide a further excuse to stay on the sidelines in patchy global market conditions.
Instead, most expect the market to pick up in the third quarter when the opening of Hong Kong Disneyland boosts consumer sentiment and interest rate worries are expected to fade.
"Some of the IPOs will go well. Trading volume will pick up. But these days one or two IPOs may not have very much significance on the market," said Joseph Lau, director at Tai Fook Asset Management.
Lau said the Bank of Communications IPO looked set to be a "very hot" deal thanks to global bank's HSBC 20 percent stake in the mainland lender.
But he said the market will probably trend lower in the coming few weeks because of renewed worries about interest rate hikes.
The market shut before blue chip firms mini-motor maker Johnson Electric Holdings Ltd and athletic shoe maker Yue Yuen Industrial Holdings Ltd reported their latest earnings.
Yue Yuen led blue chip gainers ahead of its results, rising 1.35 percent to HK$22.55.
UBS late on Friday upgraded the firm to "neutral" from "reduce", citing higher volume growth and a better product mix.
Johnson Electric gained 0.68 percent to HK$7.40 ahead of its earnings, which were seen more than doubling as cost savings boosted profit margins.
Ports-to-telecoms conglomerate Hutchison Whampoa Ltd rose 0.72 percent to HK$69.75 following news it will invest $150 million to buy up to 4 percent of China COSCO Holdings.
Global retailer Esprit Holdings fell 1.38 percent to HK$53.75 as the US dollar tapped 9-month highs against the euro.
Esprit generates the bulk of its revenue from Europe and is considered one of the few plays on the euro in Hong Kong. The stock, the Hang Seng's top performer in 2004, is down 6.4 percent over the past month.
China plays were hurt by a dip in world oil prices below US$53.50 a barrel, which prompted selling in large cap oil producer PetroChina.
China's largest oil producer fell 0.9 percent to HK$5.40 after tapping fresh record highs last week.
China plays were also hurt by a fresh dip in mainland China stocks after a rebound from eight-year lows last week on expectations of further government measures to prop up the ailing market.
The China enterprise stocks index, better known as H-shares, fell 0.35 percent to 4,716.45.
But Weiqiao Textile bucked the downtrend, gaining 4.6 percent to HK$11.35 after the European Union and China clinched a deal to defuse tension arising from a recent surge of Chinese textile exports which some investors worried could lead to a trade war.