Hong Kong's key stock index drop 0.1 percent, traders wary of earthquake fallout

Thu, May 15 04:17 PM

HONG KONG (AP) _ Hong Kong shares dropped 0.1 percent Thursday as the deadly earthquake in central China continued to weigh on sentiment. The blue-chip Hang Seng Index closed 19.77 points, or 0.1 percent, lower at 25,513.71, after having dropped as low as 25,208.22.

Y.K. Chan, a fund manager at Phillip Asset Management, said traders were cautious, fearing the full impact of the earthquake in Sichuan province wasn't clear. The disaster has killed at least 19,500 and left another 27,000 buried or missing.

Half a million houses have collapsed. "Investors are still concerned that the actual severity of the earthquake hasn't been accurately assessed," said Y.K. Chan, fund manager at Phillip Asset Management.

Despite the sluggish session for local blue chips, Hutchison Whampoa jumped 5.5 percent to HK$83.30 its highest closing level since Jan. 14 after Citigroup upgraded the conglomerate to buy from neutral.

In a report, the investment bank said it expects the company to report "respectable earnings" in 2009 after its third-generation mobile phone operations break even this year. "Although we are not that bullish on the outlook of (Hutchison's 3G arm) 3, we see light at the end of the tunnel and expect positive (earnings before interest and taxes) in 2009," Citigroup said.

The upgrade also helped drive up Hutchison's parent. Cheung Kong rose 1.7 percent to HK$124.30.

Bank of East Asia rose sharply after Goldman Sachs added the stock to its conviction buy list on strong earnings forecasts and expansion in the lender's mainland China business after it gained approval to issue debit cards to local clients. Bank of East Asia rose 3.4 percent to HK$45.70.

In contrast, Sun Hung Kai Properties fell 1.0 percent to HK$136.10 on uncertainties over the company's management. ________ On the Net: Hong Kong stock exchange Web site: http://www.

hkex.com.

hk.

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