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SCMP Reporter

WITH the summertime blues here to stay, the Hang Seng Index staggered to close yesterday down 53.32 points at 6,925.22.

  Over the week, the index fell 145.39 points, two per cent, with Monday's 118.02 decline the main action.

  ''The market has checked into hangover hotel after the euphoria from the first half of the year,'' said Kleinwort Benson assistant director Tony Edwards.

  The market's dullness was illustrated by the meagre turnover of $2.69 billion, the lowest since April 8. A large chunk of turnover was generated by foreign institutions trimming positions and taking profits.

  Barclays de Zoete Wedd sales manager Nial Gooding said the market had basically established the top of its medium-term trading range after attempting and failing to pierce 7,000 earlier this week.

  He said the market's inability to show more strength was a disappointment, given the tremendous amount of capital believed to have been injected by the mainland to create a stable environment for Tsingtao Brewery and Shanghai Petrochemical.

  MeesPierson Securities director of institutional sales Jan Perry expected the market's lethargic behaviour to continue until September, when British Foreign Secretary Douglas Hurd meets his Chinese counterpart Qian Qichen in New York.

  ''What [the meeting] suggests is there will no agreement,'' he said. ''If you're a bull, you're getting ready to commit more capital closer to an agreement so there's no real hurry. If you're bearish, you're already out.''   Despite the negative sentiment in the market and the index's lacklustre performance, Mr Perry said there were some encouraging signs.

  He said these included the fact that local investors were buying stock below 7,000 and positive news recently about Chek Lap Kok airport.

  The most significant corporate news yesterday was an announcement by China Resources Enterprises that it had acquired 31.9 per cent of Hongkong Chinese Bank from HKCB Holdings for $458 million.

  China Resources fell five cents to $3.10.

  In May, the company raised $2.11 billion and used $1.91 billion to buy land from parent China Resources (Holdings).

    South China Brokerage closed at $2.225 after its first day of trading, a 11.2 per cent jump from its issue price of $2. The stock hit an intra-day high of $2.35 during the morning session.

  Mansion House Holdings was among the most heavily traded stocks with turnover of $95.2 million.

  The shares edged up three cents to $1.98 after it announced on Thursday plans to raise $84.15 million through the placement of 45 million shares at $1.87 each.

    Tsingtao Brewery, which hit the market with a flourish on Thursday by jumping 28.5 per cent from its issue price, was the second-most heavily traded stock with turnover of $117.5 million. It dipped five cents to $3.55.

  The second and third-line stocks, particularly red-chip counters, continued to grab the spotlight as speculation assumed a bigger role.

  Mainland-controlled Ong Holdings' dramatic ascent continued with a 30 cent rise to $8. The stock has now quadrupled in value in the past month.

  Tung Wing Steel and Kader Investment were both heavily traded but lost ground. Tung Wing fell 25 cents to $5.75 while Kader surrendered 70 cents to $24. Kader still closed the weak up 14.3 per cent, $3.

  The property sub-index was sharply down, losing 115.41 points to 10,766.61. Sun Hung Kai Properties dropped 75 cents to $37, Hysan Development lost 30 cents to $16, Henderson Land was down 20 cents to $20.50 while Cheung Kong (Holdings) was unchanged at $25.30.

  Herald Holdings jumped 10.7 per cent, 19 cents, to $1.96 to recover from a steady decline that had knocked 27 per cent off the stock's value since June 16.

  Investors pushed the stock to a record high last month on reports that Herald was making toys related to the blockbuster Jurassic Park movie.



Hangover after euphoria