Hong Kong stocks finish lower on security fears

03 Aug, 2004

Hong Kong stocks ended down 0.30 percent on Monday as fresh global security threats and rising oil prices rattled investor confidence.
The United States raised its security alert level on Sunday for Washington-based financial institutions and the New York Stock Exchange after intelligence signalled a possible al Qaeda attack.
The benchmark Hang Seng Index ended down 36.64 points at 12,201.39. Turnover totalled HK $8.3 billion (US $1.06 billion), lower than HK $10.06 billion on Friday.
"Trade was cautious amid high oil prices, unfavourable US economic data and terrorist threats," said Steve Kwok, director at Avanta Investment.
"It will be hard for Hong Kong shares to spurt higher if these uncertainties persist."
After the market close, HSBC, the world's third-largest lender by market value, posted a forecast-beating pre-tax profit of US $9.37 billion. Its Hong Kong unit Hang Seng Bank posted first-half net profit of HK $6.25 billion.
The rosy result powered HSBC Holdings Plc shares in London higher, and they bucked the wider market to rise 1.92 percent. HSBC shares in Hong Kong ended unchanged at HK $115 ahead of the result.
Hang Seng shares slipped 0.75 percent to HK $99 ahead of the bank's results.
Hong Kong's fifth-largest lender, Bank of East Asia Ltd, was the top blue-chip loser, falling 2.94 percent to HK $21.45 after reporting weaker than expected earnings on Friday. Shares in China carmaker Brilliance China Automotive Holdings Ltd fell sharply. The carmaker tumbled 8.21 percent to HK $1.79 following Chinese media reports that four of the firm's executives had resigned.
But the firm, China's largest minibus maker, denied the reports in a telephone interview on Monday. Chinese state oil firm CNOOC Ltd, the top blue-chip gainer, rose 1.33 percent to HK $3.80 on high oil prices, stemming from rekindled security fears in the United States and worries about supply disruptions.
World oil prices neared US $44 a barrel, a new 21-year high, in Asian trade. Airline stocks drew selling on pricier fuel bills and security worries.
Hong Kong's dominant carrier Cathay Pacific Airways Ltd ended down 1.44 percent at HK $13.70, while China Southern Airlines Co Ltd, the country's largest carrier by passenger numbers, ended 3.74 percent lower at HK $2.575.
Select retail shares bucked the market downtrend as investors piled into the sector on hopes that free-spending visitors would help bolster business at retailers.
Shoe retailer Mirabell International rose 4.88 percent to HK $2.15 while Aeon Stores, which operates the JUSCO department store in Hong Kong China, jumped 8.7 percent to HK $7.50.
"Gains in retail shares could be fragile as higher rental expenses may crimp their earnings this year," said Steve Cheng, associate director of Shenyin Wanguo Securities.
Meanwhile, shares in chemical maker Ocean Grand Chemicals Holdings Ltd surged 37.76 percent to HK $1.35 after the firm said the charitable Bill and Melinda Gates Foundation, established by the world's richest tycoon and Microsoft founder Bill Gates, had bought a 5.38 percent stake for HK $24 million (US $3.1 million).

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