Index faces rough ride as trend towards new stock offers looks likely to continue until late next week Leading stocks finished weaker yesterday on higher turnover as the Bank of Communications (Bocom) initial public offering - one of the most popular this year - tempted some investors to sell part of their holdings so they could jump aboard the bandwagon. The Hang Seng Index fell 0.3 per cent or 47.21 points to 13,904.81 on the second day of Bocom's retail offer. Turnover surged to $14.56 billion from $9.86 billion, the third-lowest of the year so far, on Monday. The July index futures contract fell below the key 14,000-point level yesterday to 13,971, a drop of 34. Fredrick Tsang Sui-cheong, a director at China Everbright Research, said he expected the trend of investors switching funds from listed shares to initial public offerings to continue until late next week, when the books close on a string of major fund-raising activities. 'After that, the Hang Seng Index may perform better,' he said. According to local brokers, retail orders for Bocom shares have already exceeded $10 billion in just two days, about 13 times the $746.5 million offered by the mainland bank. Bocom's retail subscription closes tomorrow. However, two more new listings - China Cosco Holdings and SIM Technology, which aim to tap a total of more than $20 billion - will open for retail subscription next week. Kenny Tang Sing-hing, an associate director at Tung Tai Securities, said investors also lacked buying interest yesterday because they were waiting for the United States inflation figures. 'A rate rise in the US in June is expected but investors need cues to forecast the movement in August,' Mr Tang said. Looking ahead, he said the market focus would be on new listings, but the lack of appetite for existing stocks would result in the benchmark index trading in a narrow range of between 13,800 and 14,000 points. Johnson Electric was the biggest decliner of the day, losing 4.73 per cent to $7.05 after it reported a worse-than-expected full-year net profit on Monday. PCCW fell 1.04 per cent to $4.75 after the operator said it planned to re-enter the mobile-phone market by buying 60 per cent of the city's smallest mobile network operator, Sunday Communications, for $1.16 billion. Barclays capital said in a note that PCCW's re-entry into the highly competitive mobile market 'via the weakest player' was likely to be questioned by the market and the brokerage was now revising the city's dominant fixed-line operator's 12-month credit view from stable to negative. However, the news boosted Sunday, which ended up 18.86 per cent at 63 cents - slightly lower than PCCW's offer price of 65 cents. Esprit lost 2.32 per cent to close at $52.50. The fashion retailer continues to suffer because of the weakening euro against the US dollar. Wheelock added 0.43 per cent to $11.50. The conglomerate reported an 81 per cent rise in net profit to $4.16 billion for the year to March. Yue Yuen Industrial rose 3.1 per cent to $23.25 and was the biggest blue-chip gainer despite reporting a 3.76 per cent fall in interim net profit to US$152.33 million. Morgan Stanley said in a note that the overweight rating on Yue Yuen had been maintained as the second financial quarter's performance of the world's largest shoemaker was 'solid' and they saw some 'margin pick-up kicking in'. Hutchison and Cheung Kong ended flat, at $69.75 and $73, respectively. Of the four Hang Seng sub-indices, the utilities sector was the only gainer, rising 0.2 per cent. Towngas was the growth driver for the sector, rising 0.63 per cent to $15.90. CLP and Hongkong Electric ended flat at $44.50 and $34.80, respectively.