The placement of $50.7bn China Mobile shares by Vodafone and declines in U.S. stock markets weighed on Hong Kong shares yesterday. Both the Hang Seng Index and HSCEI retreated 1.5% to finish at 21,088 and 11,776 respectively. HSBC (5) cut 1.3% whilst BOC Hong Kong (2388) advanced 2.0%. China Mobile (941) closed down 3.8% at $78.9 versus the placing price of $79.2. China Unicom (762), the worst performing index stock, plunged 4.1%. Local property stocks ended lower by 0.6% to 1.9%. Steel, shipping, coal and small Chinese banks underperformed the HSCEI. Angang Steel (347), China Shipping Development (1138), China Shenhua (1088), Yanzhou Coal (1171) and CITIC Bank (998) and China Merchants Bank (3968) shrank 2.5%-4.2%. Dongfeng Motor (489), the best performing constituent of the HSCEI, added 2.4%. Ten largest PRC property developers all decreased with an average loss of 1.8%.

CCB (939, $6.53) 6M Target $7.95 BUY