Hong Kong shares close lower in line with Wall St; second-line banks in focus

HONG KONG (AFX-ASIA) - Share prices closed lower after the losses on Wall Street, but the selling pressure was not substantial amid continued expectations that the U.S. will cut interest rates again next week, dealers said.	    They said several second-line banks -- HKCB Bank, International Bank of Asia and Wing Lung Bank -- turned higher, on renewed speculation that HKCB Bank will be taken over by either a Singapore or a China bank or by another local bank.	    The Hang Seng Index closed down 59.97 points or 0.44 pct at 13,540.81, off a low of 13,445.98 and a high of 13,599.63, on turnover of 5.81 bln hkd.	    The Hang Seng May contract last traded at 13,493 points.	    The Hang Seng China Enterprises Index was up 6.68 points at 477.32, while the CAC Index was 3.08 points higher at 1,247.06.	    The Tracker Fund dropped 0.15 hkd to 13.55, and the GEM Index was up 8.93 points at 270.67 on turnover of 226.93 mln hkd.	    Josephine Hui, director of Celestial Asia Securities, described today's mark et as "inactive and quiet", because of a lack of fresh major news.	    "Market turnover was small and most investors were absent from the market ... the Hang Seng Index just followed the modest falls on Wall Street last night," she said.	    Outperforming the market were second-line banks, which benefited from renewed speculation that the company will be taken over by either a Singapore or China bank or by another local bank, Hui said.	    HKCB Bank was up 0.20 hkd or 5.97 pct at 3.55, International Bank of Asia rose 0.10 to 2.225 and Wing Lung Bank gained 0.60 to 37.40.	    HSBC declined 1.0 to 97.25, Hang Seng Bank rose 0.50 to 91.25, while Bank of East Asia added 0.15 to 18.60.	    Among property stocks, Cheung Kong fell 0.75 to 90.75, Sun Hung Kai Properties lost 0.75 to 73.75 and New World Development shed 0.10 to 9.85.	    "Financials and properties could rise in the mid-term, because of the possible U.S. interest rate cut ... but they should correct downward, if the U.S. interest rate reduction does materialize next week, Hui said.	    Among telecoms stocks, Pacific Century CyberWorks was unchanged at 2.825, Hutchison lost 0.25 to 86.75 and China Mobile was 0.30 lower at 39.50.	    MTR Corp extended its gains while profit-taking hit China Unicom. Both companies will become members of the Hang Seng Index effective June 1.	    China Unicom lost 0.10 to 12.50, while MTR Corp gained 0.10 to 13.60.	    On the GEM board, tom.com rose 0.025 to 2.125, hongkong.com was down 0.005 at 0.36, and Sunevision lost 0.02 to 1.92.	    Teleeye Holdings closed at 1.36 hkd, against its issue price of 0.60 hkd, on its trade debut on the GEM board.	    For red-chips and H-shares, Sinopec Corp gained 0.05 to 1.38, Beijing Yanhua grew 0.01 to 1.13 and Tsingtao Brewery was unchanged at 2.325.	    Huaneng Power was up 0.175 at 4.475 on a technical rebound, and Guangdong Brewery finished up 0.04 at 0.56, on renewed speculation that a foreign company is interested in acquiring the brewery.	    China Merchants lost 0.05 to 5.75, CITIC Pacific fell 0.25 to 23.20 and Legend added 0.05 to 6.35. 

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