HONG KONG, July 24 (Reuters) - Hong Kong shares are expected to rise on Thursday, with financial stocks leading the way, tracking their U.S. counterprarts and with a sharp pullback in oil prices likely to boost refiners, airlines and retailers.
U.S. stocks rose on Wednesday as financial shares climbed after President George W. Bush dropped a threat to veto a housing rescue bill.
After the closing bell, the U.S. House of Representatives approved the housing market rescue legislation. The bill will now go to the Senate.
"The financial markets have suffered a lot of pain in recent times and something like the housing market rescue bill should bring hope to investors," said Ben Kwong, COO with KGI Securities.
"But nothing has really changed fundamentally, the only real change is that greedy funds that think they have milked the commodities rally dry are now switching to stocks."
Oil prices fell more than $4 after government data showed a big increase in U.S. inventories of gasoline, boosting companies sensitive to higher fuel costs, such as retailers and airlines.
Hong Kong shares climbed 2.7 percent to a five-week high on Wednesday, as lower oil prices eased concern over the impact of high energy costs on businesses and consumers, while China Eastern Airlines surged the most in nine months amid talk of a possible merger.
STOCKS TO WATCH: * China Eastern Airlines and its smaller rival Shanghai Airlines said on Thursday they had not discussed a possible merger, playing down a media report on a possible tie-up that had sent their shares surging.
On Wednesday, shares in China Eastern soared 11.8 percent after a report in a mjor mainland business magazine triggered speculation of a potential consolidation in the industry. * Chinese banks have been working on setting the record right after their shares were battered on fears of exposure to troubled U.S. mortgage lenders.
China Construction Bank (CCB) has denied a report that it has $7 billion in bonds issued by troubled U.S. mortgage lenders Fannie Mae and Freddie Mac , state media reported on Thursday.
Brokerage CLSA estimated this month that CCB, the country's No. 2 lender, holds $7 billion in Fannie and Freddie debt, or 0.83 percent of assets. The figure was widely cited in media reports.
Bank of China president, Li Lihui, said on Wednesday that its exposure to Fannie and Freddie debt was manageable, although he did not give details.
* Weichai Power Co Ltd said late on Wednesday it estimated its net profit attributable to shareholders to increase between 50 and 100 percent year-on-year for the first half of 2008 as its engine business was boosted by rapid expansion of heavy-duty truck and construction machinery markets. For statement please see here
* Jiangsu Expressway Co Ltd said it would issue 1.1 billion yuan worth of corporate bonds at 100 yuan per bond after the China Securities Regulatory Commission granted approval on the bonds issue plan. For details please see here * The Hong Kong and China Gas Co Ltd said on Wednesday it proposed to issue U.S. dollar denominated guaranteed notes to fund capital expenditures and for general corporate purposes. But terms of the notes, including the aggregate principal amount, coupon and tenor have yet to be determined. For statement please see here
* Great Wall Motor will appeal against an Italian ruling that bars it from selling a compact car in the European Union because it too closely to resembles Fiat's Panda, according to a lawyer from the Chinese car maker.
* CITIC Resources Holdings may offer up to US$10 billion for coal gas assets of Australia's Origin Energy, highlighting the mainland's growing thirst for new energy sources, the South China Morning Post said, quoting sources. -------------------MARKET SNAPSHOT @ 00:09 GMT ------------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 .SPX 1,282.19 0.41% 5.190
USD/JPY
10-YR US TSY YLD
SPOT GOLD
US CRUDE CLc1 $124.44 0.00% 0.000
DOW JONES .DJI 11632.38 0.26% 29.88
ASIA ADRS .BKAS 149.04 0.85% 1.25
------------------------------------------------------------- > Asian inflation at records, may be peaking > SE Asian Stocks-Rallied, S'pore at 4 wk high on property [.SO] > US STOCKS-Wall St rises on oil drop, housing plan optimism [.N] > Oil slips further amid worries over U.S. demand [O/R] > FOREX-Dollar rises on oil drop, housing bill [USD/] > Bonds slips as safety bids fade on stock gains [US/] > Gold sinks over 3 pct on oil tumble, dollar rise [GOL/] (Reporting by Parvathy Ullatil; Editing by Anne Marie Roantree)
Thursday, July 24, 2008
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