STOCKWATCH: Li & Fung higher on bargain-hunting by funds

HONG KONG (AFX-ASIA) - Li & Fung Ltd shares were higher on bargain-hunting activities by funds, dealers said.	    They said the market seems to have digested the U.S. economic slowdown factor and its impact on Li & Fung, and is currently taking a second look at the company.	    Analysts said investors had over-reacted to the U.S. slowdown, resulting in a significant drop in Li & Fung's share price previously.	    However, funds have started to buy into the stock again, they added.	    At 11:27 am, Li & Fung was up 0.60 hkd or 4.286 pct at 14.60 on volume of 2.526 mln shares.	    The Hang Seng index was down 112.87 points at 13,180.24.	    Tung Tai Securities' Giovanni Kuang said Li & Fung shares have recently been more volatile than usual.	    "I think it is because the results posted by the company recently were not as bad as the market thought they would be."	    He said the market has been too pessimistic about the U.S. slowdown and its impact on the company, and has been very cautious about the stock.	    Kuang, however, acknowledged that the slowing U.S. economy and remaining uncertainties would have an impact on Li & Fung as more than 70 pct of its turnover comes from the U.S.	    He is calling a "hold" on the stock in view of the uncertain outlook for the U.S. economy.	    "The U.S. is trying very hard to correct the slowdown by cutting its rates but we will only see the effect in a few months. Things are very uncertain at the moment," he added.	    He said although Li & Fung's share prices are currently quite attractive for bargain-hunters, there are concerns going forward that its earnings will be affected by the slowdown in the U.S. economy.

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