Business

Mon Jun 02 02:41:29 PDT 2008

(For Shanghai market reports, click [.SS])

HONG KONG, June 2 (Reuters) – Hong Kong stocks closed 1.3 percent higher on Monday, boosted by locally-listed Chinese financials and gains in the Shanghai market, where power and coal producers rose on speculation of higher electricity charges.

Top insurer China Life <2628.HK> rose 3 percent while smaller rival Ping An <2318.HK> agined 4.2 percent.

China Mobile <0941.HK> continued to recover after giving up close to 10 percent last week following the announcement of the mainland telecom industry restructuring which was seen favouring the fixed-line providers. The stock rose 2.5 percent, gaining for a third straight session.

China Telecom, the nation’s largest fixed-line provider, will announce its buy out of wireless operator China Unicom’s CDMA assets after. China Telecom along with China Unicom and China Netcom have been suspended from trading in Hong Kong pending announcement of restructuring details. [ID:nHKG246787]

"Two rumours drove the buying, one is that the telecom stocks which have been suspended from trading will resume soon and secondly there is speculation that China will increase electricity charges," said Peter Lai, director with DBS Vickers.

The benchmark Hang Seng Index closed 298.24 points or 1.22 percent higher at 24,831.36 points. The index hit a high of 24,923.28 in the afternoon session, spurred by gains in China Mobile and CNOOC <0883.HK>.

Shares in CNOOC jumped percent while PetroChina <0857.HK> rose percent as oil prices held steady above $127 a barrel after a series of dips.

Asia’s largest oil refiner Sinopec Corp <0386.HK> climbed 3.7 percent after the company’s parent said it had struck more gas in its second exploration well in northeastern China. [ID:nPEK247266]

The China Enterprises Index <.HSCE> which gauges the perfomance of top locally-listed mainland companies, ended up 255.86 points or 1.86 percent at 14,026.37.

Mainboard turnover fell to HK$74.3 billion ($9.53 billion) as compared with HK$85.5 billion on Friday.

Shares of China Railway Construction Corp <1186.HK> fell 7.6 percent after a 14 percent rally last Friday. The drop came even as Goldman Sachs initiated coverage with a buy rating, saying it benefits from a still booming construction cycle in China.

Power investor and electricity supplier CLP Holdings <0002.HK> fell 8.2 percent to HK$64.70 after an almost 9 percent rise last Friday. Friday’s gains came after the stock was included in the Morgan Stanley China Enterprises Index, said Castor Pang, strategist with Sun Hung Kai Financial.

Shares of CITIC Resources Holdings <1205.HK> fell 4.1 percent to HK$3.99 after it said it planned to raise HK$2.5 billion through an issue of 788.68 million rights shares at HK$3.2 each, to enhance financial conditions, for funding future investments and for working capital. (Reporting by Donny Kwok; Editing by Lincoln Feast)

($1=HK$7.8)

Provided by Reuters

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