Hong Kong stocks move downward on the first trading day of 2008

Share prices for Hong Kong stock market closed lower on January 2, 2008, the first trading day of this year, due to the Wall Street's fall on Monday and the weak performance of neighboring markets.

The Hang Seng Index opened at 27,632.20, and ended down 252.13 points or 0.91% at 27,560.52, fluctuating between 27,299.45 and 27,853.60. Turnover was HK$75.87 billion. The China Enterprise Index, which tracks the state-owned Chinese enterprises listed on the Hong Kong Stock Exchange, closed at 16,006.81 points, down by 0.73% or 117.91 points.

For the first trading day in 2008, 541 stocks fluctuated lower and 424 stocks ended higher. Blue chips performed weakly, only 9 of the total of 43 went higher, of which, MTR Corporation Ltd<66> moved up 7.32%, being the strongest blue chip for yesterday; Hang Lung Properties Ltd<101> moved down 3.4%, being the weakest blue chip. Hang Seng Hong Kong Composite Index moved down 0.28% while Hang Seng Mainland Composite Index moved down 1%, indicating a stronger performance of Hong Kong local stocks than those China-related stocks.

The weak performance was led by China-related stocks including companies from industries of telecoms, insurance, banking, petroleum and electricity.

Given the speculation that Singapore Airlines (SIA) and Temasek Holdings will be forced to improve their offer for a combined 24% stake in China Eastern Airlines<600115> <670>, the mainland carrier went up 4.4% or HK$0.34. Air China<601111> <753> was down 1% or HK$0.12 at HK$11.54. Air China's parent China National Aviation Corp (CNAC) said earlier that the Singapore firm's offer for China Eastern Airlines was not fair and suggested further negotiations.

Property stocks suffered losses following the move of Guangzhou Government to impose land value-added tax. Cheung Kong<1> went down 0.83%, Sun Hung Kai<86> retreated HK$0.24 or 2.3%. China Resources Land Ltd<1109> went down by 5.2% from HK$ 144.3 down to HK$143.1. Agile Property Holdings Ltd<3383> retreated HK$0.56 or 3.9%.

Insiders attribute the weak performance to concerns over the U.S. economic prospects this year due to housing sector and credit market problems. Dealers, as well, believe the new tightening measures in China to rein in the economy and control inflation will show effect in 2008.