HK shares seen lower, China Life earnings eyed
(Reuters)
Updated: 2006-08-28 09:44
HONG KONG - Hong Kong stocks are expected to consolidate further on Monday
with shares of Chinese companies listed in Hong Kong taking the spotlight as
they release earnings reports.
China Life Insurance Co Ltd, the country's
largest life underwriter, is expected to report its earnings later in the day, while
top Asian oil refiner Sinopec Corp. earlier beat expectations with a 21
percent rise in quarterly earnings as sky-high crude prices offset a
loss-making refining business with Beijing capping product prices to protect low-income
groups.
Sinopec also said on Monday its parent would buy back
shares from three state shareholders in a deal that an official newspaper said
would cost 11.895 billion yuan ($1.5 billion).
The Hang Seng Index ended up 0.43 percent at 16,955.45 on Friday, for a
weekly loss of 2.2 percent.
"The market will generally go sideways or become softer," said Dale Tsang,
managing director at Polaris Capital (Asia) Ltd. "The H shares aren't going
anywhere; if they're above 7,000, people are selling."
Tsang said Sinopec "is more complex".
"We have to look at the forward prices of oil and petrochemical products. The
results are good; it's cheap, but it has high gearing. It will trade around the
$5 range in the short-term."
Two analysts put forecasts for China Life's
first-half earnings at 8.6 billion yuan and 7.8 billion yuan, respectively, a jump of
more than 50 percent.
Analysts say investors have more or less priced in the
growth of the company.
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