Hongkong and Shanghai Hotels Recommendation: Sell Brokerage: ING Barings HONGKONG and Shanghai Hotels' principal assets are the Peninsula Hotel, the Kowloon Hotel, the New York Peninsula Hotel, the Repulse Bay complex and Quail Lodge in California. Margins are being squeezed as it tries to maintain high-quality service. Rent concessions for retail tenants also will hurt earnings. Flat growth is expected until 2000. ING has downgraded 1998 earnings growth to $650 million. National Mutual Asia Recommendation: Long-term accumulate Brokerage: Merrill Lynch NATIONAL Mutual Asia is an investment-holding company involved in the insurance business. Other subsidiaries have interests in property management, unit-trust administration and trustee services. Interim net profit fell by 40 per cent to $352 million as its portfolio shrank by 4.1 per cent. Immediate share performance might be muted, despite the recent sharp fall in share price, until evidence emerges that the insurer can defy the economic outlook. Hang Seng Bank Recommendation: Reduce Brokerage: Merrill Lynch HANG Seng Bank is a unit of the HSBC Holdings global banking group. It provides commercial banking and financial services, with activities focused in Hong Kong and the mainland. Given the uncertain economic and banking outlook, the share price is unlikely to perform well in the intermediate term. The bank has the SAR's highest price-to-book ratio, at 2.4 times, and has underperformed the market this year. South China Morning Post(Holdings) Recommendation: Buy Brokerage: Indosuez W.I. Carr Securities SOUTH China Morning Post (Holdings) prints, publishes and distributes newspapers and operates three bookshops. It also publishes and distributes magazines. A share-price fall holds out promise of long-term value. The stock's price has fallen from $8 in July to about $4.15. SCMP has been an efficient newspaper, with newsprint taking only 5 per cent of revenue.