Activity remained brisk with $20.98 million worth of shares changing hands.

'The focus of the day remained on debut trade of China Netcom. Other than that, the market is pretty quiet without much news flow,' said Steven Leung Wai-yuen, an equity salesman at UOB Kay Hian.

Brokers said market attention was focused on new rules that would make it easier for mainland nationals to take funds overseas, a move that could presage a broader shift toward capital account convertibility that allowed investment capital be invested in overseas markets.

Migrating mainlanders will be allowed to convert their China-based yuan assets into foreign currencies and take them out of China from December 1.

'Hong Kong and Macau ought to be among primary destinations which these assets will be transferred to, boosting both luxury residential and stock markets,' Mr Leung said.

The fourth largest telecoms provider on the mainland, China Netcom, touched an intraday high of $9.50, before settling at $9.25 - a gain of 10.11 per cent from its initial offer price at $8.40.

Lenovo lost 4.5 per cent to $2.65, extending losses of 11.2 per cent on Tuesday, after the largest personal computer maker in China announced a set of disappointing six-month results, prompting many brokerages including Citigroup Global Markets, Merrill Lynch and Deutsche Bank to downgrade ratings and cut earnings estimates for the company.

'We had expected to see soft sales, but the actual decline was larger, 19 per cent below our forecasts, resulting in [earnings] shortfall of 22 per cent,' said Kirk Yang, an analyst with Citigroup, in a research note.

Corporate personal computer sales accounted for 57 per cent of Lenovo's sales but the segment saw a drop in gross margins from 14.8 per cent to 12.4 per cent year on year.

'This is due to local competitors cutting prices, and with Dell also competing in this space, we believe the margin pressure is not likely to improve,' Mr Yang said.

Mr Yang has downgraded his stock rating on Lenovo from 'buy' to 'sell' and trimmed his per-share earnings forecasts by 10.5 per cent for next year to March and 18 per cent for 2006. He has also lowered his price target from $3.61 to $2.61 per share. 'We don't believe township personal computers will be able to offset the margin declines from corporate personal computers,' the analyst said.

China Southern Airlines fell 2.94 per cent to $3.30. This follows a weekend announcement that assets would be injected from the parent into the listed entity.

'The injection will likely improve the airline's earnings outlook and strengthen its dominant market position,' wrote Deutsche Bank analysts Stacy Shi and Nam Nguyen in a report.

'However, we believe that the stock's current valuation has already reflected the potential earnings upside,' the analysts said. They downgraded the airline from 'buy' to 'hold'.

That said, the analysts cautioned yuan appreciation as an upside risk to their earnings forecasts for the carrier.

A sensitivity study by Deutsche Bank analysts shows that following the asset injection, a 5 per cent appreciation in the yuan against the US dollar will lift China Southern's net profit after tax next year by 150 per cent, largely due to one-off revaluation of the airline's US dollar-denominated debts.

Recently listed Hutchison Telecommunications International Ltd (HTIL) was unchanged at $6.10, remaining above its initial offer price of $6.01. The shares will be added to the MSCI Standard Index series effective of the trade close on November 30 and Goldman Sachs, HTIL's listing sponsor, has initiated coverage on the shares with an 'outperform' rating.

Mainland gas distributor Panva Gas rose 2.13 per cent to $3.60 after its controlling shareholder, Sinolink Worldwide sold 48 million shares in the company, representing about 5.09 per cent of the issued share capital, to Value Partners at $3.25 per share.

Value Partners also acquired a 5.16 per cent stake, or 120 million shares, in Sinolink for $102 million from controlling shareholder and chairman Ou Yaping at 85 cents each. Shares in Sinolink added 7.69 per cent to $1.12.