Hong Kong shares higher led by China Mobile

HONG KONG (AFX-ASIA) - Share prices were higher in mid morning trade, reversing opening losses, with further gains on NASDAQ overnight lending support to telecom stocks, in particular China Mobile, dealers said.

Dao Heng Bank gained despite DBS Bank's downward revision of the offer price to take over Dao Heng, while red chips and H-shares extended gains as investors have ignored the liquidity squeezing effect of China Travel 

International parent's plan to place 170 mln China Travel shares.

At 11:51 am, the Hang Seng Index was up 70.73 points at 13,948.68, off an early low of 13,798.32 and a high of 13,989.16, on turnover of 5.57 bln hkd.

The Hang Seng May contract last traded at 13,940 points.

The Hang Seng China Enterprises Index was up 2.41 points at 526.50, while the CAC Index was up 8.14 points at 1,297.90.

The Tracker Fund gained 0.05 hkd to 14.00 and the GEM Index was up 1.33 points at 266.35 on turnover of 134.80 mln hkd.

"The market is full of liquidity. With little negative news, investors are just buying into market heavyweights, in particular China Mobile, to send the index higher," Herbert Lau, head of research with Celestial Asia Securities, said.

China Mobile rose 0.40 to 41.40 hhd on trade of 7.51 mln shares

Lau said further gains on NASDAQ overnight also played a role to stabilise the telecom sector.

Hutchison Whampoa gained 0.75 to 88.25 and Pacific Century CyberWorks added 0.025 to 2.70.

Legend rose 0.05 to 5.90 after unit Digital China formally announced it would offer 88.26 mln new shares at a price of no more than 3.68 hkd per share for a main-board listing scheduled for June 1.

"Market sentiment has improved a lot. As long as U.S. equity markets are able to stabilise, we will see more upside in Hong Kong," Lau said.

In the bank sector, HSBC was unchanged at 99.75, while Hang Seng Bank rose 0.50 to 90.50.

Dao Heng Bank rose 1.00 to 61.00, while DBS Bank has cut the offer price by 0.13 hkd to acquire Dao Heng.

Guoco, the major shareholder of Dao Heng Bank, gained 1.20 to 45.20.

Among property stocks, Cheung Kong was unchanged at 92.75, while Sun Hung Kai Properties gained 0.25 to 78.75 and Henderson Land rose 0.10 to 38.50.

New World Development fell 0.20 to 10.10, while Hang Lung gained 0.20 to 7.30.

Dealers said buying in China related stocks continued higher on the back of China's robust economic growth while China Travel International parent's plan to place 170 mln shares has imposed little impact on the sector.

China Travel rose 0.06 to 1.79 on trade of 231.45 mln shares.

Jiangsu Expressway rose 0.06 to 1.70 and Beijing Airport gained 0.05 to 2.15.

Huaneng Power rose 0.075 to 5.05 and Shandong Power rose 0.02 to 1.92.

	    On the GEM board, tom.com fell 0.025 to 2.20, while Sunevision rose 0.01 to 1.81.

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