Decline in shares not as steep as previous two sessions as investors beef up their portfolios Hong Kong shares continued to edge lower yesterday, but the selling pressure eased compared with the previous two days as some investors took advantage of the decline to beef up their portfolios. After hovering in a fairly narrow range for most of the day, the Hang Seng Index did make a more pronounced dip in the late afternoon, however, which coincided with another upward push in the US dollar. The greenback had been largely steady earlier in Asian trading after sharp gains in the past three days. The Hang Seng Index finished 0.38 per cent, or 52.32 points, lower at 13,712.04 - a significant improvement from the near 500-point drop it saw on Tuesday and Wednesday combined. The H-share index dropped 0.57 per cent, or 26.21 points, to 4,538.77, weighed down by metals stocks as metals prices remained volatile after a sharp sell-off on Tuesday. Angang New Steel fell 2.51 per cent to $3.875 and Aluminum Corp of China dropped 1.77 per cent to $4.15. Turnover eased to $23.14 billion from $28.04 billion, but remained well above the six-month daily average of $15.32 billion. 'A lot of stocks have fallen more than 5 per cent in the past few days and quite a few people saw it as a buying opportunity,' said Frederick Tsang, head of research at China Everbright Securities. However, the market was still trading near a multi-year high so buying was not that aggressive, he said. Some investors were happy to hold off ahead of today's release of US non-farm payroll data for last month, which will be important in determining whether the recent strength in the US dollar is backed up by economic growth. The rebounding dollar is seen as the key reason for the current correction in the Hong Kong stock market. HSBC, which had held up well during the previous two days of declines with strong support at $130, was particularly sought after, and retail investors also continued to accumulate Macau-concept stocks - both actual and potential. HSBC traded 50 cents higher for some of the day, but finished unchanged at $130.50. It was the most traded company with $2.27 billion worth of shares changing hands. 'Some retail investors bought in the morning to try and capture the [anticipated] rebound, but the momentum wasn't there,' said an equity salesman at a local brokerage. 'They were probably looking for a day trade, and when it didn't work they sold again.' Hang Seng Bank and Bank of East Asia also ended unchanged. BOC Hong Kong rose 0.34 per cent to $14.70. Property stocks remained under pressure on concerns about a slowdown in demand as local interest rates are expected to have to follow their US counterparts higher soon. The minutes from the US Federal Reserve's monetary policy meeting last month indicated that some members felt US rates were too low to combat growing inflation pressures. Cheung Kong and Sun Hung Kai Properties both fell 0.33 per cent to $74 and $73.75, respectively, Hang Lung Properties eased 0.43 per cent to $11.45 and Henderson Land Development dropped 0.52 per cent to $38. Recently listed China Netcom Group Corp (Hong Kong) gained 6.46 per cent to a new record high of $10.70 after Morgan Stanley and Credit Suisse First Boston both initiated coverage on the fixed-line operator with 'buy'-equivalent ratings. CSFB's Edison Lee was the more bullish of the two, giving the stock a target price of $15.60. 'Netcom is our top pick among Chinese telcos. We believe its attractiveness is driven by cost-saving potential, cellular business upside, creative deal-making prospects [with PCCW] and cheap valuation,' he said in a research note. Morgan Stanley's Lina Choi expects 15 to 20 per cent share price upside in the next six to nine months. Netcom was also underpinned by news that its parent was getting closer to acquiring a 20 per cent stake in PCCW. 'People are speculating that eventually those assets will be injected into the listed company, as is the tradition among mainland telecoms companies,' one broker said. PCCW rose 0.51 per cent to $4.90. Yesterday's top performer was Get Nice, which rallied 122.22 per cent to $4.40. The small provider of financial and brokerage services said a number of prominent Hongkongers with Macau connections would buy into the company through a share placement. The new shareholders include Chinese Estates chairman Joseph Lau Luen-hung, New World Development chairman Cheng Yu-tung, Angela Leung On-kei, Macau casino magnate Stanley Ho Hung-sun's wife, and Lee Wai-man, chief executive of the Macau Jockey Club. 'Investors are hoping the new shareholders will inject some of their gaming businesses into the company. Otherwise there is no need for these big players to buy into this type of company,' said Kenny Tang Sing-hing, a research manager at Tung Tai Securities.