SECOND and third-line stocks took the spotlight yesterday as the Hang Seng Index lost 34.89 points to 6,697.15, falling for the second straight day after climbing more than 500 points earlier in the week. Brokers said the modest drop had been expected but noted that respectable turnover of $4.3 billion indicated healthy support from investors who believed there was still value available. ''I think the blue chips had their day on Wednesday and those people who haven't got enough money in the market are looking for the laggards with value or perceived value,'' said Mr Jan Perry, director of institutional sales at Pierson Securities (Asia). Among the most popular was Shun Ho Construction, which saw 51.7 million shares traded on turnover of $114.6 million. The stock was up 12.5 cents, 5.4 per cent, at $2.425. Brokers said Shun Ho had been boosted by a positive brokerage report distributed to foreign investors. Another heavily traded stock was Asia Commercial Holdings, 33.3 million shares changing hands. Brokers attributed the stock's seven-cent rise to 95 cents to advertisements the company had placed promoting a commercial complex in Shanghai. After falling 57.7 points on Thursday, the index fluctuated in the morning, finishing the session 18.12 off at 6,713.92. In the afternoon, it slipped another 16.77 points. The April futures index contract closed at 6,773 points as the premium increased to 80 from 38. Mr Howard Gorges, a director at South China Brokerage, said that despite the drop there was a firm undertone to the market as investors waited for the British-Sino talks on proposals for democratic reform in Hongkong to begin on April 22. After a huge inflow of investment from the US and Europe, said Mr Gorges, local investors appeared to have shed their caution of the past couple of months and renewed interest in second and third-line stocks. Mr Gorges said one company benefiting from this situation was Century City International, which owns large stakes in Paliburg International and Regal Hotels International. Century City rose 15 cents to $2.325. Juko Laboratories finally ended its strong rally, as its shares suffered the sharpest fall of the day. They closed down 19.5 per cent, 17 cents, at 70 cents. Chevalier International, which was among the most heavily traded, fell 7.6 per cent, 12 cents, to $1.44. The company issued a statement yesterday morning stating it was not aware of any reason for the recent increases in the price and turnover of its shares and warrants. Of the blue chips, Hutchison Whampoa and Cheung Kong continued to be heavily traded. Their turnovers were $163.5 million and $174.1 million respectively. Hutchison fell 40 cents to $17.60 after chairman Li Ka-Shing was quoted as saying the company might issue new shares. Cheung Kong fell 60 cents to $22.90. Chesterfield shares made the largest jump, of 18.3 per cent, 13 cents, to 84 cents. Ong Holdings was up 15.4 per cent, 24 cents, to $1.79 after the stock resumed trading yesterday. China Industrial International was up 12.8 per cent, 52.5 cents, at $4.625 after the company was informed by Hongkong Macau (Holdings) of a conditional approach by a Malaysian group to buy Hongkong Macau's 39 per cent stake in China Industrial for $5 a share. All the sub indices except utilities fell. The property sub-index saw the largest drop, 118.82 points.
