Markets

Hong Kong shares seen lower on global growth worries

HONG KONG : Hong Kong shares were set to start lower on Thursday, with sectors most sensitive to global growth expecte

Published February 23, 2012 Updated February 23, 2012 05:36am

3 min

By Shoaib Ur Rehman

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On Wednesday, the China Enterprise Index of the top mainland listings rose 1.2 percent. The broader Hang Seng Index finished up 0.3 percent at 21,549.3 points.

Strength in Chinese developers outweighed weakness in Li & Fung Ltd after weaker-than-expected earnings from customer Wal-Mart Stores Inc.

The next immediate upside target for the Hang Seng Index is 21,725.7, the top end of a gap that opened up between Aug. 4 and 5 last year, which it briefly tested on Monday.

Even if it scales above this level, it is faced with another gap between 22,041 and 21,725, the low of Aug. 2 and the high of Aug. 3, when the benchmark was on its way to a 20 percent loss in 2011.

The benchmark is seen trading in its recent range, supported in the near term at its Monday low, at about 21,478.

Short selling increased for the first time in four sessions on Wednesday, accounting for 7.2 percent of total turnover, up marginally from Tuesday. At HK$70.4 billion though, turnover remains lackluster.

Elsewhere in Asia, Japan's benchmark Nikkei was down 0.3 percent at 9,529.2 points, while the Korea Composite Stock Price Index (KOSPI) was down 1.2 percent at 2,004 points.

FACTORS TO WATCH:

HSBC , Europe's biggest bank, said it would stop providing its private banking service in Japan for clients who hold more than 10 million yen ($124,500) in assets.

MGM Resorts International hopes to ride a bounceback in leisure and gambling in 2012, despite posting a wider-than-expected quarterly loss after soaring costs offset a revenue recovery for the operator of Las Vegas Strip icon Bellagio. Its unit, MGM China, which owns and operates MGM Macau, rode a 26 percent surge in net revenue to $719 million in the fourth quarter.

Shareholders of China's TPV Technology Ltd have approved its taking on the loss-making television unit of Dutch group Philips Electronics, giving it a brand to help push its global expansion.

Dachan Food (Asia) Ltd, China's biggest white meat supplier, will focus on the development of own-brand products this year as its seeks to grow, and sees food safety as the most important issue in the market. Dachan, a main supplier of fast food restaurants Kentucky Fried Chicken and McDonald's Corp, aims to raise own-brand products to more than 50 percent of total in three to four years.

Dragonair, a unit of Hong Kong's dominant carrier Cathay Pacific Airways Ltd, said on Wednesday that it plans to expand its fleet 20 percent this year by adding six aircraft and will hire more staff to meet growing demand in Asia.

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