Hong Kong shares advance

Hong Kong blue chips rose 1.3 percent on Tuesday as telecom plays surged amid expectations that China will soon issue long-awaited 3G licences. Gains in China Telecom and mainland banks propelled Hong Kong-listed shares in mainland companies, or H shares, up 2.1 percent.
"China said it is near making a decision about 3G, and of course that would fire up interest in telecom stocks," said Howard Gorges, vice chairman of South China Brokerage.
The benchmark Hang Seng index gained 241.46 points to close at 18,944.19 on turnover of HK$41.4 billion (US $5.3 billion) compared to Monday's HK$37.2 billion. The China Enterprises index of H shares added 182.13 points to end at 8,758.17.
Some said the broad market continued to lack direction, unable to clear its 14-day moving average. "The Hang Seng index has failed to break above the 19,000 level, so we're still in consolidation," said Kenny Tang, associate director at Tung Tai Securities, adding that many investors were on the sidelines awaiting several initial public offerings expected in coming days.
Fixed-line operators were among the day's winners amid expectations that China would first award the long-awaited 3G licences to China Netcom Ltd and China Telecom.
China Netcom vaulted 8.5 percent to HK$16.16, earlier tapping an all-time high. The company's chief executive, Zuo Xunsheng, earlier knocked down speculation that it was on the verge of merging with rival China Unicom in the industry's biggest reshuffle in four years. China Unicom raced up 6.5 percent to HK$9.14 and China Telecom, the biggest boost to the H shares, surged 15.6 percent to HK$4.01, just cents off the record high set in earlier trade.
China Mobile lagged its peers, climbing 0.7 percent to HK$63.75 as investors bet the first 3G licences would not go to the country's top cellular operator. Mainland banks climbed, with China Construction Bank leaping 3.2 percent to HK$4.17. Industrial & Commercial Bank of China rose 1.5 percent to HK$3.95.
Gaming stock Melco International Development slid 3.8 percent to HK$20.5 in heavy trade after Goldman Sachs downgraded the stock's rating to "neutral" from "buy", citing an absence of near-term catalysts to drive the share price. Goldman also said it was removing Melco from its Asia Pacific Buy List.
Chinese piped gas distributor Panva Gas Holdings rocketed 20 percent to HK$4.75, having earlier hit an all-time high of HK$5.10, after Hong Kong and China Gas Ltd said it would take control of Panva in a HK$3.2 billion (US $411.7 million) deal.