6:00AM New York, 6:00PM Hong Kong - Hong Kong dips 1.2% on weaknesses on the Wall Street.

In Hong Kong trading Hang Seng dropped 1.2% or 340.20 to 27,179.49, while the China Enterprises index of H shares declined 2% or 312.66 to 15,590.74.

Daily turnover on the main board was recorded at HK$113.5 billion compared to HK$99.8 billion on January 4.

Construction companies advanced on the rising expectations that the U.S. Federal Reserve will cut interest rates on January 30th after a weak December month employment report. Unemployment in December rose 0.3% to 5% sparking fears that the economy may be losing steam.

MTR Corp led the gainers in the property sector with a rise of 9.1% after Credit Suisse on Friday raised its target price for MTR by 31% to HK$35. MTR closed at HK$34.90. MTR holds one of the largest parcels of undeveloped land in Hong Kong.

Henderson Land jumped 2.4% to HK$76.3 and Sino Land rose 3% to HK$28.45 on the news.

Xinhua News Agency reported today that Shanghai High-Speed Railway Company has announced that the construction project of the Rmb 83.7 billion Beijing-Shanghai High-Speed Railway will be split among four companies: China Railway Group, China Communications Construction Company, China Railway Construction Corporation, and Sinohydro Corporation.

The railway from Beijing to Shanghai which stretches 1,318 kilometers has been divided into six route sections named TJ-1 to TJ-6. China Railway was awarded two tenders - TJ-2 and TJ-5 worth 26.3% of the entire project at Rmb 22 billion.

China Railway Construction was also awarded two tenders with a total cost of Rmb37.7 billion.

China infrastructure stocks climbed on the news. China Railway soared 2.1% to HK$11.60 and China Communications Construction Limited spiked 0.7% to HK$22.90.

The Standard, online publication, reported today that China National Aviation Corporation said yesterday it will offer not less than HK$5 per share for the 24% equity in China Eastern in a counterbid to Singapore Airlines offer if the latter fails to win shareholders approval at tomorrow’s extraordinary general meeting.

CNAC’s counter offer is 31.58% higher than that from Singapore Airlines’ and values the takeover bid at HK$9.43 billion.


Mirae Asset Global Investment Hong Kong analyst Patrick Pong Kwok-hung said today that this year’s outlook for banks in Hong Kong is positive as the net interest margin is likely to remain at last year’s level at 1.85%.

Also the prime HIBOR rate, used by small and medium sized banks, is expected to fluctuate between 3.2% and 3.3%.

HSBC plunged 1.8% to HK$127.80.

Crude oil for February delivery fell 0.8% to $97.11. Oil producer PetroChina Co Limited declined 2.3 % to HK$13.86.

China National Materials Co Limited gained after the company said it would build three new production lines, boosting annual production in Guangdong province to six million tons. China National Materials stock closed up 5.3% to HK$11.88.


Asian Markets Round up

In Tokyo Nikkei 225 Index closed lower 190.86 or 1.30% to 14,500.55, in Hong Kong Hang Seng index closed decreased 340.20 or 1.24% to 27,179.49, in Australia ASX 200 closed lower 145.00 or 2.30% to close 6,161.60.