Hong Kong stocks saw a second day of lacklustre trade yesterday, again dampened by the Government's Tracker Fund offering and impending economic figures from the United States. The Hang Seng Index shed 88.31 points to end at 12,709.07 on a turnover of $6.27 billion. Analysts said it was a quiet day with most of the action in second and third-line technology-related counters. Investors were holding back following the initial public offering of the Tracker Fund - the subscription period for which closes in just less than two weeks - and before a US$1.6 billion China Telecom placement, expected to be priced as early as today. Furthermore, third-quarter gross domestic product estimates from the US are due out today, as are the employment cost index figures, both of which could indicate the likelihood of an interest rate rise by the Federal Reserve next month. HSBC managed to stay on the upside, finishing 0.57 per cent firmer at $88. Cable & Wireless HKT also firmed, by 1.44 per cent to HK$17.50. Sources said HKT could be stronger on news the company would unveil details today of its strategic deal with Microsoft Corp to offer an Internet-related service. However, blue-chip developer Sun Hung Kai Properties closed 0.84 per cent lower at $58.50, despite another expected announcement today of the details of an alliance with Microsoft. Talk of a Walt Disney deal for a Lantau Island theme park surfaced again, with the speculators expecting an announcement on Monday. Analysts said details were sketchy on the subject and they had only heard rumours of a possible announcement next week after a Tuesday report in a Florida newspaper that Disney planned to invest US$200 million to $250 million in the resort. 'It's dull, dull, dull,' Paribas Asia Equity research head Simon Irwin said. Nomura International Securities regional sales trading head John Lau said: 'It was a very uneventful day. You've still got the Tracker Fund draining liquidity and you've got the China Telecom placement.' China Telecom dropped 0.8 per cent to HK$24.65. Cathay Pacific plunged 8.81 per cent to $15, with analysts saying there were reports of British and US stockbrokers' recommending the carrier's stock as a 'sell', saying its earnings recovery prospects were 'not as good as many people believed'. 'Also, on the cost side, the [brokers] said the margins are still under pressure,' one source said. The retail punters' appetite for second-tier technology-related plays continued, with shares in SmarTone Telecommunications rising 2.99 per cent to $27.50 and Hanny gaining 16.9 per cent to $4.15. Hanny - 30.78 per cent owned by Hutchison Whampoa - on Tuesday said it was looking to sell assets in one of its subsidiaries in a bid to invest in information technology operations. Shares jumped on mainland exchanges yesterday as reports outlined a slow pace of listing for state-owned shares, settling liquidity concerns. Brokers said the visit by US Treasury Secretary Lawrence Summers to Beijing also boosted sentiment. Amsteel Securities vice-president Jackie Chiu said: 'I think there are some signs that . . . China will enter WTO (World Trade Organisation) this year. 'Even if the chance is very small, it's better than a few weeks ago when they had no hope at all.' KEY FIGURES Close: 12,709.07 (- 88.31) Turnover: $6.27 bln Volume: 5.02 bln shares Day's high: 12,846.3 Day's low: 12,687.66 Advanced: 269 Declined: 257 Unchanged: 369 October futures: 12,720 (- 140) November futures: 12,665 (- 190)
