HONG KONG (Thomson Financial) - Hong Kong shares ended the Friday morning session higher, as investors chased bargains and snapped Industrial & Commercial Bank and Li & Fung on hopes of better earnings this year.
The mainland's biggest bank ICBC said its first-half net profit probably rose more than 50 percent from 40.8 billion yuan ($591 million) a year earlier, lifted by interest income and fees. Exporter Li & Fung, which supplies consumer goods to Wal-Mart stores, is benefiting from higher retail sales and consumer spending in the United States.
'We are oversold, so some stocks are ripe for bargain-hunting,' said Jackson Wong, investment manager at Tanrich Securities. 'The U.S. stock market is closed later today, so that's one less thing to worry about.'
In the first half, the Hang Seng Index (HSI) shed 20.5 percent, its worst performance in 14 years, as investors were discouraged by the continuing credit crisis, record high oil prices, accelerating inflation and threats of higher interest rates.
U.S. financial markets are closed Friday for a public holiday.
The HSI rose 234.55 points or 1.1 percent to 21,477.33, off a high of 21,534.05.
ICBC gained 2.6 percent to HK$5.14.
The lender's rosy earnings forecast helped revive interest in other Chinese financial counters, which slumped on Thursday on talk that Ping An Insurance, the mainland's second-biggest insurer, was under investigation for tax evasion. Ping An has denied the speculation.
Investors also bought Ping An after the insurer said there is no need to make provisions for its investment in Belgian-Dutch banking and insurance group Fortis NV. The insurer has a 4.99 percent stake in Fortis, the biggest single shareholder in the company.
Ping An rose 2.8 percent to HK$50.25, while bigger rival China Life Insurance was up 1.4 percent at HK$25.75.
China Merchants Bank gained 3.6 percent to HK$23.20 and Bank of Communications advanced 2.2 percent to HK$8.76.
Li & Fung was up 3.8 percent to HK$23.05.
'After the latest disappointing jobs report in the U.S., the market expects the Federal Reserve to maintain interest rates at the current low levels. That's helping retailers,' said D. Gorton, analyst at Louis Capital Markets (Hong Kong).
Chinese PC maker Lenovo Group rose 0.4 percent to HK$5.43. Lenovo partnered with Intel Corp and Chinese e-commerce group Alibaba.com to provide personal computers for small and medium-sized enterprises.
Alibaba was down 1.7 percent to HK$10.18.
Cathay Pacific, Hong Kong's top carrier, extended its fall and lost another 2 percent to HK$13.56 on bleak earnings outlook.
Earlier this week, Cathay said its full-year and first-half profit will be 'disappointing' given rising oil prices. The airline said the most recent spot price of jet fuel is 93 percent higher than the average price that it paid for the whole of 2007.
'At current jet fuel spot prices Cathay is loss making and a resilient oil price creates the potential for losses in second half of 2008,' CLSA said in a note to clients.
The brokerage cut its rating on the stock to 'sell' from 'underperform' and trimmed its price target to HK$13 from HK$14.50.
Chinese oil refiners and airlines advanced after crude oil prices eased from record highs.
China Petroleum & Chemical Corp. (Sinopec) jumped 3.4 percent to HK$7.07 and PetroChina was up 2.1 percent to HK$9.75.
China Eastern Airlines gained 1.4 percent to HK$2.23 and China Southern Airlines rose 0.7 percent to HK$2.94.
($1 = HK$7.80)
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