SECOND and third-line stocks saw moderate trading yesterday, with the resignation of Malaysian business tycoon Lee Ming Tee from Allied Group and company results dominating activity. Non-index stocks took up less than 60 per cent of turnover, with Sino Land and Guangdong Investment the most heavily traded shares outside the Hang Seng Index. Sino Land was the fifth most heavily traded stock in the wake of disappointing results. The group saw net profit fall 22.6 per cent to $900 million. Turnover for the 12 months to June 30 was down by more than 50 per cent to $1.79 billion. The stock was up five cents to $5.65 on a turnover of $143.32 million. Guangdong Investment was heavily traded, with 37 million shares worth $115.13 million changing hands. The shares rose 12.5 cents to $3.10. The resignation of Mr Lee from his posts at Allied caused a stir in group shares. Allied Group, Mr Lee's flagship company, rose by seven cents to $1.04 on a turnover of $90.69 million as 86.7 million shares changed hands. The group's shares were the ninth most heavily traded by value and the second most heavily traded in terms of number of shares. Brokers suggested that the resignation in the wake of the publication of the Allen Report into Allied Group's corporate affairs had been inevitable. ''However, with Brian O'Connor as chairman, the change appears purely cosmetic, given that he knew Mr Lee in the UK and Mr Lee still owns a considerable number of shares in the group,'' said one broker. Allied Properties (HK) was up 11 cents to $1.43 on a turnover of $23.74 million as 16.71 million shares changed hands. The share was the eighth most heavily traded in terms of the number of shares. Paragon Holdings, formerly First South China, was unchanged at 52 cents on a turnover of $7.6 million as 14.5 million shares changed hands. The share was the ninth most heavily traded in terms of number of shares. Allied Industries International was the second best performing stock of the day, with a nine cent, 13.23 per cent, rise to 77 cents on a turnover of $6 million. Jinhui Holdings was the best performer of the day, rising 18 cents, 14.75 per cent, to $1.40 on a turnover of $2.85 million. New World Development continued its good recent run, rising 80 cents to $20.80 on turnover of $119 million. China-based Shanghai Petrochemical rose seven cents to $1.94 on a turnover of $37.32 million. China Aerospace rose 25 cents to $3.625 on a turnover of $15.4 million. The group registered a 204 per cent rise in profit to $10.98 million for the six months to June 30. Among the worst performers of the day was Yanion, a group due to be taken over by Tomei International. The stock fell two cents to 50 cents on a low turnover of $358,700. According to S.G. Warburg Securities, the stock market is on a historic price-earnings ratio of 14.8 and prospective PEs of 13 for this year and 11.2 for 1994. The average 12-month PE is 11.8. It is yielding 2.1 per cent, 2.6 per cent and 3.1 per cent respectively. The broker noted a tendency to sell among local investors. ''A generally disappointing results season suggests that profit momentum is slowing, and on 12 times prospective earnings the market's rating has attained a post-1987 high.'' Barclays de Zoete Wedd assistant director Nial Gooding said the re-rating was also a good excuse for fund managers to window-dress their portfolios, as yesterday marked the end of the third quarter. Local investors helped swell turnover yesterday to $4.05 billion. They entered the market on learning that US investors were on a buying spree. Mr Gooding expects the rally to last until Governor Chris Patten delivers his policy speech on October 6, unless there is negative political news. ''Notwithstanding tangible nastiness from China, the rally will last, as histrionics from China does not affect us any more,'' he said.