HONG KONG: Share prices retreated yesterday from a 14-month high as investors chose to lock in profits ahead of key economic indicators due for release on the mainland today.

The Hang Seng Index slid 66.85 points, or 0.3 percent, to 22,318.11, halting a two-day, 2.1 percent gain. Twenty-two stocks on the 42-member measure declined while 19 climbed. October futures slipped 0.2 percent to 22,287.

The Hang Seng China Enterprises Index, which tracks H-shares of mainland companies, fell 0.3 percent to 13,001.59.

"The market underwent consolidation, not a correction, with liquidity still abundant," said Ben Kwong, chief operating officer at KGI Asia.

"A steady dollar kept players away and investors were sidelined for fresh incentives before betting on further upside," Kwong said.

The market saw additional pressure as mainland telecom giants China Mobile Ltd and China Telecom Corp were sold down after reporting worse-than-estimated earnings, while heavyweight oil producers fell on lower crude prices.

China Mobile, the world's No 1 phone company by market value, slid 1.9 percent. China Telecom, the country's largest fixed-line phone carrier, fell 2.6 percent.

"Sales aren't showing much improvement and we'd probably need to wait till the first quarter of next year to see improvement in the bottom line," said Chris Leung, a Hong Kong-based portfolio manager at Taifook Asset Management Ltd.

"If there's been decent profit, I'd suggest take some chips off the table for now," he said of oil- and commodity-linked shares.

But market watchers said demands for assets plays helped slow the slide as asset revaluations due to underlying weak sentiment on the US dollar made China property stocks appealing, while power counters, which are sensitive to mainland economic policy changes, were in demand partly as a hedge against risk exposure to potential power tariff changes.

Mainland developer China Resources Land jumped 4.06 percent while China Overseas Land also climbed 2 percent.

Huaneng Power, China's largest electricity provider surged 7.5 percent.

Huaneng reported that it had swung to a net profit in the third-quarter because of increased output from new operating units, two tariff increases in the second half of 2008 and lower coal costs.

A Deutsche Bank research note on Wednesday upgraded Huaneng to "buy" from "hold" with a target price of HK$6.30.

China Daily/agencies

(HK Edition 10/22/2009 page4)