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Search for holiday cash places pressure on HSI

Advertising agency Beijing Media up 19.7pc as China plays fit nicely with institutional and retail buyers

Hong Kong's leading stocks remained under slight selling pressure yesterday, as some investors cashed in before the holidays and others bought elsewhere in the market.

That benefited Beijing Media Corp, which gained 19.7 per cent to $22.70 on its first day of trading, after jumping 25 per cent immediately at opening. Its $904.67 million offer was heavily oversubscribed, leaving retail and institutional investors to chase the stock in the market.

The company, which is the advertising agency for the mainland's state-owned Beijing Youth Daily newspaper, also fitted in nicely with demand trends, analysts said.

'Any money that is coming in is looking at China-related stocks or Hong Kong domestic plays, especially retailers,' said Miles Remington, the head of sales trading at BNP Paribas Peregrine, noting department store operator Lifestyle International among yesterday's strong performers. The stock rose 3.6 per cent to $11.50.

Macau concept stocks also remained in favour, although Hongkong Chinese, a securities investor which also provides investment banking services, fell 30 per cent to $1.40 after the management said it was not aware of any investment into the company by a gaming-related firm as was widely speculated on Tuesday.

The market may not have been totally convinced, however, as only part of Tuesday's 88.6 per cent gain was erased. Hongkong Chinese's parent company, Lippo China Resources, fell 26.5 per cent after adding 49.4 per cent on Tuesday.

The Hang Seng Index dropped for the fourth day in five to close 29.71 points, or 0.21 per cent, lower at 14,151.08. The H-share index fell 0.49 per cent to end 23.66 points lighter at 4,762.4.

'Investors lost their enthusiasm to drive the market higher after the Link Reit listing was called off and the market is feeling a bit listless as many people are taking a rest,' said Peter Lai Wing-leung, a sales director with DBS Vickers Securities.

Trading volumes fell slightly to $17.43 billion from $18.09 billion on Tuesday, and brokers said the market was unlikely to see much window dressing from fund managers before the end of the year as many were already sitting on healthy profits. In any case, such buying was not expected until after the Christmas holidays, they said, projecting the Hang Seng Index will trade in a range of 13,800 to 14,300 until then.

The market will close at noon tomorrow and reopen on December 28.

The big property developers were generally weaker. Sun Hung Kai Properties lost 0.65 per cent to $76.50 and Henderson Land Development fell 1.23 per cent to $40. Hang Lung Properties, which is more focused on property investment, and retail property owner Wharf outperformed, however, adding 0.42 per cent and 0.74 per cent, respectively.

Esprit - the best-performing Hang Seng Index member this year with an 84.7 per cent gain - fell for the second consecutive day as investors realised some of that profit. The counter closed 1.91 per cent lower at $46.10.

The mainland's largest insurer, China Life Insurance, was also under pressure, dropping 2.7 per cent to $5.40 after one shareholder sold about half of its stake in the company following the end of the one-year post-listing lock-up period on Monday.

'People fear that some other tycoons could make further placements. That's why it fell,' Mr Lai said.

Chow Tai Fook Enterprises netted a profit of $179 million by placing 107.9 million H shares at $5.35 each, which was the middle of the indicated range and a modest 3 per cent discount to the latest closing price.

Among the potential sellers are Henderson Land chairman Lee Shau-kee, who bought 428 million shares at last year's initial public offering, and Cheung Kong and Hutchison Whampoa, which bought the same amount of shares between them.

Investment holding company A-Max, which earlier this month agreed to invest $640 million for a 7.41 per cent stake in a company building one of the largest casinos in Macau - with an option to double up on its investments within six months - jumped an additional 10.5 per cent in heavy trading to $3.675.

The first phase of the casino would open this afternoon, A-Max spokesman Kevin Lo said in a statement quoted by Bloomberg.

A-Max, which previously was mainly engaged in manufacturing and sales of electronic consumer products, liquid crystal display modules and panels, has rallied 143 per cent since the acquisition announcement on December 8.

'There is still a lot of potential upside in Macau and punters are devoid of much more [to bet on] outside that sector,' Mr Remington said, noting that some China stocks were starting to look expensive.

Among other actively traded Macau counters, K Wah Construction rose 17.1 per cent to $4.95 and Melco International Development gained 4.34 per cent to $18.05.

After the market closed, Macau's Statistics and Census Service said the number of visitors to the former Portuguese colony in the first 11 months of the year rose 42 per cent to 15.2 million from the same period last year.

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