WITH interim results expected during the next few weeks and some recent transactions to increase investor interest, the banking sector attracted a lot of attention yesterday. HSBC Holdings climbed $1 to $72 as speculation mounted that it might sell 10 per cent of 61.48 per cent owned Hang Seng Bank, possibly to CITIC Pacific. Hang Seng Bank, which had not lost as much ground during the past month as other banking stocks, was up $1 to $57.50. Vickers Ballas director Barry Yates said that, with Guoco Group's acquisition of Overseas Trust Bank and China Resources increasing its stake in Hongkong Chinese Bank, market watchers thought something was in the works involving HSBC's ownership of Hang Seng. JCG will kick off the sector's results season tomorrow while Bank of East Asia will report on Thursday. HSBC's Midland Bank will report on August 4. Investors showed their approval of Guoco's $4.8 billion plan to buy Overseas Trust Bank from the Government by pushing the stock up 70 cents to $21. Guoco said it would seek a listing for its Dao Heng unit following completion of the OTB acquisition. The formal sale and purchase agreement is expected to be signed before Friday. Sun Hung Kai Securities research director Percy Au-young said the deal would be positive for Guoco and he expected the stock to climb sharply, replicating the jump by Dah Sing Financial following its purchase of Wing On Bank last year. ''Guoco's profit will be very much enhanced and it will draw attention to other banking stocks,'' he said. South China Brokerage director Howard Gorges said many investors got off the sidelines yesterday after waiting to gauge the enthusiasm for selling in the market that could push the index lower. Despite the declines posted last week by blue-chip stocks such as Cheung Kong, Hutchison Whampoa and Sun Hung Kai Properties, Mr Gorges said there was healthy buying interest because these stocks had weakened recently. Hutchison rose 40 cents to $19.90, Sun Hung Kai gained 75 cents to $36.25 while Cheung Kong was up 40 cents to $24.90. Mr Au-young said his firm had recently issued a report recommending the property sector because the stocks had been oversold, tumbling 15 to 20 per cent off record highs while the index had gained only 10 per cent. ''People are worried that China's austerity programme will hurt Hongkong's property market, but the demand for residential property continues to be strong,'' he said. ''There's a difference between fundamentals and the share prices.'' Sino Land was heavily traded with the stock gaining 35 cents to $5.65, while Hongkong Realty & Trust, which reported a 56 per cent profit increase last week to $1.11 billion for fiscal 1993, was up 20 cents to $13.70. In a research report issued yesterday, Schroder Securities said Hongkong Realty and 65 per cent owned Realty Development were facing small and diminishing land banks that would limit growth, leading it to issue holds on both companies. Of the 33 index stocks, the only one not to rise was Miramar Hotels, which was unchanged at $15.40. Jardine Matheson posted the biggest climb, moving up $1.50 to $55. Mainland-controlled stocks, which have been hammered recently, continued to rebound. Ong Holdings jumped 23.3 per cent or $1.45 to $7.65 after tumbling to $5.45 last Thursday. Shougang International, formerly Tung Wing Steel, was up 13.3 per cent or 62.5 cents to $5.30. It closed at $4.525 on Thursday. Both stocks were heavily traded, with turnovers of $107.1 million and $102.4 million, respectively. Capital Automation, which makes computer-aided textile design systems, was up two cents to 76 cents after announcing a 12.5 per cent profit drop to $17.7 million for the year ended March 31 against $20.2 million in 1992.
