Hong Kong shares close higher on technical rebound; underlying sentiment weak

HONG KONG (AFX-ASIA) - Share prices were higher on a technical rebound, although sentiment remained cautious after the mixed performance in Wall Street last night, dealers said.	    They said red chips and H-shares were the biggest gainers, rising on optimism over the economic growth in China, while selling pressure in PCCW remained notable after its negative results announcement this week.	    The Hang Seng index closed up 82.75 points at 12,760.64, off an early high of 12,802.52 and an early low of 12,578.36, on turnover of 6.55 bln hkd. 	    The Hang Seng April contract last traded at 12,860 points.	    The Hang Seng China Enterprises index was up 16.66 at 418.02 and the CAC index up 23.14 points at 1,054.50.	    TraHK was up 0.05 at 12.90 hkd on volume of 2.50 mln units.	    The GEM index was down 0.38 points at 256.89 on turnover of 195.97 mln hkd. 	    Marty Chan, an analyst with Polaris Securities, said today's gains should not be interpreted as a turnaround in sentiment, because market turnover was fairly thin.	    He said investors were reluctant to enter the market, amid the continued uncertainty surrounding the U.S. stockmarkets.	    "It would be difficult to predict the movement in Wall Street. Investors were spooked by a series of corporate profit warnings recently," he said.	    Market tone should remain negative, with the Hang Seng index likely to be rangebound between 12,500 and 13,000 points next week, he said.	    Red chips and H-shares outperformed as they are expected to benefit from the growing Chinese economy, Chan said.	    "H-share companies have not offered any dividend in the past. However, most of them have now changed their dividend policy, leading to a higher dividend yield," he said.	    Among those stocks, China Shipping Development rose 0.11 hkd to 1.19 and Zhenhai Refining gained 0.08 to 1.22.	    Huaneng Power added 0.325 to 4.20 and Harbin Power rose 0.03 to 0.57.	    Jiangsu Expressway gained 0.06 to 1.46 and Anhui Expressway rose 0.07 to 1.01.	    However, Jilin Chemical fell 0.05 hkd or 8.47 pct to 0.54 on volume of 112.84 mln shares. The company posted a net loss of 836 mln yuan after writing off its outdated production facilities.	    Legend was up 0.10 at 5.30, China Merchants finished up 0.15 to 5.45, and Shanghai Industrial rose 0.10 to 12.70.	    In the financial sector, HSBC was 1.25 higher at 92.0, Bank of East Asia was unchanged at 17.55 and Dao Heng Bank fell 0.10 to 36.0.	    PCCW continued to perform weakly, as investors were pessimistic over its business prospect, after it reported a 200 net loss of 886 mln usd, dealers said.	    PCCW fell 0.175 hkd or 5.38 pct to 3.075 on volume of 96.93 mln shares.	    Hutchison Whampoa rose 1.0 to 81.50 and China Mobile lost 0.10 to 34.30.	    For property stocks, Cheung Kong rose 1.75 to 81.75, Sun Hung Kai Properties gained 1.0 to 74.50 and New World Development added 0.05 to 10. 00.	    CLP rose 0.50 to 41.30 after the company yesterday announced it will acquire a 49 pct stake in Shenmu II Power Station in Shaanxi Province for 18.35 mln usd.	    On the GEM board, tom.com was unchanged at 1.99 and Sunevision was steady at 2.10.	    New listing M21 Technology last traded at 0.345, compared to its offer price of 0.335, on trade of 23.43 mln shares. 

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