Hong Kong Review – Slide Continued In Hong Kong

Hong Kong stocks were mostly down on Thursday as global rout resumed on the back of recent China’s economic data. Hang Seng index ended down 0.9% to 21,105.71, but printed an intraday low at 20,926.48 before The Bank of East Asia’s strong earnings pulled the index off lows.

Cathay Pacific lost 3.82%, while China Merchants Holdings fell 3.31%. China Shenhua Energy also dropped 2.58%. HKEX which recently reported 2Q10 losses resumed its slide by another 2.25% as Deutsche Bank cut its ratings to SELL from BUY and set the target to HK$116.20 vs. prior HK$130.10.

Bank of East Asia moderated the losses as it announced solid earnings in 1H10. Net profit jumped 78% to HK$2.08 billion as impairment losses declined sharply. The results beat the consensus of HK$1.47 billion. BEA ended at HK$31.50 or up 2.61%.

Elsewhere, rail operator MTR Corp. reported its 1H10 net profit jumped 48% (yoy) as strong commercial property prices rose along with improvements in its core operations. It held a “cautiously optimistic” outlook for the 2H10 as the fare hike in June has started to bring positive impact on its operation and as the economy continues to recover. Net profit was at HK$6.64 billion compared to prior year’s HK$4.50 billion, while revenue rose 63% from HK$8.63 billion to HK$14.10 billion. First-half dividend is kept at HK$0.14, the same as last year.

On other news, PetroChina planned to close down Daqing Refinery next week for maintenance for about 40 days; from Europe, China Telecom Europe aims at harnessing M&A strategy to expand its presence in Europe. Tieto Corp, Logica, and some parts of Fujitsu Consulting may be available. PetroChina ended at HK$8.66 or down 1.25%, China Telecom edged down 0.53% at HK$3.76, and MTR Corp fell 1.57% to end at HK$28.25.