STOCKWATCH: China Travel Intl lower on profit-taking

HONG KONG (AFX-ASIA) - China Travel International Investment Hong Kong Ltd shares were lower in midmorning trade on profit-taking after posting gains yesterday, dealers said.

The stock was firmer yesterday despite the announcement of a placement/new and issue of new shares and dealers said they had found the gains puzzling.

At 11:34 am, China Travel was down 0.12 hkd at 1.60 on 34.413 mln shares.

The Hang Seng index was down 121.08 points at 13,718.02.

An analyst with a foreign brokerage said the profit-taking was erasing gains recorded by the company yesterday as investors realise that the issue of new shares will have a dilution effect on earnings.

In addition, the shares are offered at a discount to market price.

He said China Travel is seeking to refocus its operations on tourism and tourism related businesses.

"They have said this in the past. They have a stake in a power plant and are looking to sell the stake to raise funds for its tourism investments."

He said the company is looking to buy hotels and other travel-related businesses in China.

"They are also searching for some business alliances with Chinese tourism agencies," he said.

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