STOCKWATCH: Hong Kong utilities lower as funds move to interest-sensitive shrs

HONG KONG (AFX-ASIA) - Utilities stocks were lower in early trade as investors switched into interest rate-sensitive stocks such as banks and telecommunications companies, analysts said.	    They said investors who had been holding utilities, often considered a "safe haven" in a volatile market, are moving to capture the strong rally seen in interest rate-sensetive stocks.	    At 10:44 am, the Hang Seng index was up 503.88 points at 13,476.68 while the utilities sub-index was down 406.94 points at 20,559.55.	    CLP Holdings was down 0.90 hkd at 32 on volume of 1.292 mln shares while Hongkong Electric lost 0.45 to 27.25 on 701,784 shares.	    Hong Kong & China Gas was down 0.15 at 9.25 on 2.581 mln shares.	    An analyst with a foreign brokerage said investors are moving into undervalued stocks like telecommunications and banks.	    "It is quite normal. When the market rebounds, investors tend to switch out of utilities."	    He said the selling of utilities stocks has more to do with liquidity rather than the fundamentals of the companies.	    "Investors are pulling out because they need funds to capture the rally on other stocks."	    He said fundamentally, there is nothing wrong with the utilities stocks, which are assured of 5.0-6.0 pct earnings growth this year.	    He said the utilities sector had already outperformed the market by about 50 pct in the last 12 months.	    "Fund managers have put a significant portion of their investments in utilities. Now it is the time to unload the stocks and buy other stocks," he added. 

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