Hong Kong stocks ended flat yesterday as the focus shifted to new issues in the secondary market. The Hang Seng Index closed down 0.03 per cent at 12,339.94. The H-share index fell 27.68 points or 0.64 per cent to 4,284.92. 'Lack of direction was the main feature of the market [yesterday],' a local broker said. Turnover was thin at $9.93 billion, as some money was diverted to recent initial public offerings. 'People are now talking more on IPOs, especially those from China such as China Mengniu Dairy, China Shipping Container Lines [CSCL] and Ping An Insurance,' another broker said. Mengniu will debut and CSCL will be priced today. Ping An will open its retail offer on Monday. 'Some preferred to see how the market would react to these massive IPOs,' the broker said. Swire Pacific was the worst performing blue chip yesterday. The counter fell 2.81 per cent to $51.75 on aggressive selling by US houses, according to brokers. But some remained upbeat on the stock. 'Upside potential is higher than downside risk as the property and aviation businesses are turning around and we tend to take the low discount side as the upside for its earnings and asset value,' Eve Cheng of Sun Hung Kai Financial Group, said in a report. China Telecom, however, bucked the trend to rise 2.94 per cent to $2.625. 'I think China Telecom is fundamentally sound ... Also, its valuation now looks attractive after a heavy sell-out due to its mammoth placement earlier,' a broker with a European house said. Reports that China Netcom would delay its IPO helped lift sentiment towards China Telecom amid speculation the company would merge with China Unicom, and China Mobile and China Netcom would become another integrated unit, the broker said. 'The IPO delay of China Netcom would benefit the rival China Telecom-China Unicom unit,' he said, noting China Unicom rose 1.66 per cent to $6.10 and China Mobile lost 0.21 per cent to $23.10. Concern over credit-tightening measures had led to speculation about reduced investment by telecoms, sparking talk of industry mergers, Fung Ee Lim of Deutsche Bank said in a report. 'Merging state-owned telecoms into two integrated operators of equal size could in one stroke level the playing field and resolve the regulatory impasse,' he said. But, politically, it would be difficult for the government to endorse the merger plan and implementation was unlikely for the time being, Mr Fung added. Mainland carmaker Denway Motors rose 1.57 per cent to $3.225 after falling 6.61 per cent on Tuesday on concerns of high car-loan delinquencies. Oil plays, however, were mixed due to the fall in crude prices on Tuesday. PetroChina fell 1.35 per cent to $3.65 while Sinopec was unchanged at $2.95. Key figures Close: 12,339.94 (-4.22) Turnover: $9.93 bln Volume: 11.68 bln shares Day's high: 12,426.69 Day's low: 12,283.57 Advanced: 379 Declined: 603 Unchanged: 737 June futures: 12,379 (+29) July futures: 12,378 (+27)
