Hong Kong Shares Seen Up; Cement, Autos Weak

   Image From: hongkongfunds.org

Hong Kong shares are poised to start slightly higher on Tuesday as the local market plays catch up after a long weekend, although profit warnings from Chinese cement companies may keep investors wary.

The Hang Seng index ended last month up 4.4 percent, recovering slightly from a rough ride in May that saw the index drop 11.6 percent. The index faces resistance at its 200-day moving average, currently at 19,556.3, a level that has capped gains since mid-May. The index closed on Friday at 19,441.46.

Caution over the impact of China's slowdown on company earnings has kept investors from making big bets despite relatively low valuations. The China Enterprises index of top locally listed mainland firms fell 1.1 percent in June underperforming Hong Kong and regional peers.

Elsewhere in Asia, Japan's Nikkei was up 0.5 percent while South Korea's KOSPI was up 1 percent as of 0035 GMT.

STOCKS TO WATCH

* Auto stocks such as Brilliance Automotive and Geely could see weakness in Hong Kong as offshore investors react to reports on Monday in local Chinese media that Guangzhou became China's fourth city to put a cap on annual car sales to help ease a worsening traffic gridlock.

* Apple Inc has paid $60 million to Proview Technology (Shenzhen), a unit of Hong Kong-listed Proview International Holdings Ltd, to end a protracted legal dispute over the iPad trademark in China. The iPad dominates China's tablet PC market with more than 70 percent market share, but Lenovo Group Ltd's Lepads and Samsung Electronics Co Ltd's Galaxy Tabs have been gaining traction.

* Gaming stocks are seen in focus after Macau government data on Monday showed that gambling revenue rose 12.2 percent from a year earlier to 23.3 billion patacas ($2.92 billion) in June, faster than May's 7.3 percent gain, government data showed on Monday. Analysts had expected a 15 percent increase.

* American International Assurance (AIA) sold some of its shares in Thailand's largest convenience store chain, CP All Pcl , in big-lot transactions on the Thai market's local and foreign boards on Friday, broker sources said. AIA, part of Hong Kong-based AIA Group, remains a major shareholder of CP All after the stake sales.

* China National Materials Co Ltd warned that it expected its consolidated net profit for the six months to end-June to fall substantially on a year ago due to a big decrease in the selling price of its main products. A few overseas projects were also expected to incur loss. For statement click: http://www.hkexnews.hk/listedco/listconews/sehk/2012/0702/LTN20120702082.pdf

CONFERENCE

- PwC news conference to review IPO activities in the first half of 2012 and the market trend for the rest of the year.

- Ernst & Young news conference - IPO activities in 2012: Review of first-half and second-half outlook.

- HSBC Global Asset Management launches global high yield bond fund news conference.

MARKET EVENTS

- China Longyuan Power Group Corp Ltd EGM in Beijing

- Lenovo Group Ltd AGM

ECONOMIC DATA

- Hong Kong retail sales for May

- Euro zone producer prices for May

- UK money supply M4 for May

- US all car sales for June

- US all truck sales for June

- US total vehicle sales for June

- Australia RBA cash rate for July

- Japan overtime pay for May