Hong Kong shares open lower on Wall St fall; China Eastern, Air China in focus

Share prices opened lower after Wall Street fell on Monday, the last trading day of the past year, amid worries over market prospects in 2008 as the housing sector and credit worries continue to cast a shadow on the US economy.

Dealers also noted the possibility of China announcing additional measures to rein in its economy and control inflation.

China Eastern Airlines (CEA) and Air China were in focus amid speculation that Air China's parent may vote down the proposal of Singapore Airlines (SIA) and Temasek Holdings to buy a combined 24 pct stake in CEA.

Air China's parent China National Aviation Corporation (Group) (CNAC) said the Singapore firms' 3.80 hkd a share offer for CEA stake "does not reflect the fair value" of CEA. It called on CEA to conduct further talks with SIA and Temasek regarding possible amendments to the terms of the share subscription agreement.

CNAC also said it reserves the "right to make further proposals which are more in the interests of all shareholders." CNAC holds 12 pct stake in China Eastern.

The Hang Seng index opened down 180.45 points or 0.65 pct at 27,632.20.

China Eastern was up 0.16 hkd or 2.08 pct at 7.87 and Air China was up 0.10 hkd or 0.86 pct at 11.72.