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Nikkei Markets

Hong Kong shares slip as eyes turn to Trump-Xi meeting at G-20

Hang Seng Index falls 1.8% in April-June quarter but still up 10% in year so far

HONG KONG (Nikkei Markets) -- Hong Kong shares fell on Friday amid subdued trading activity, as investors watched for developments related to the meeting between the American and Chinese presidents in Japan this weekend.

The Hang Seng Index declined 0.3% to 28,542.62. Pork producer WH Group, which has significant business interests in the U.S., fell 3.2%. Among other large contributors to losses on the index, HSBC Holdings and declined 0.4% and 1.5%, respectively.

The gauge shed 1.8% during the April-to-June quarter as Sino-American trade tensions heated up, giving up some of the roughly 12% rally it saw in the first quarter of 2019. The index has risen about 10% during the first half of 2019.

With world leaders gathered in Osaka, Japan, for a Group of 20 meeting, investors have been looking ahead to the outcome of the talks between Presidents Donald Trump and Xi Jinping on Saturday. The presidential meeting comes about seven weeks after the U.S. imposed a new round of tariffs on Chinese goods, with Beijing retaliating. Washington has threatened to levy additional tariffs on $300 billion-worth of Chinese goods.

The outcome of the trade talks was very uncertain, said Castor Pang, head of research at Core Pacific Yamaichi International.

Investors were largely waiting on the sidelines, he said, adding that fund flows into emerging market equities had slowed in recent days, compared with early June. Pang said he did not expect the gauge to have much upside.

Turnover on the Hong Kong Stock Exchange's main board was at 71.78 billion Hong Kong dollars ($9.19 billion) by the midday break, lower than usual for the time of day. Markets in Hong Kong will be closed on Monday for a local holiday.

Pang expects trade-sensitive stocks to be volatile when markets reopen on Tuesday.

On the mainland, the Shanghai Composite Index declined 0.6%, while the yuan traded onshore edged 0.1% higher to 6.8701 against the dollar.

Hong Kong Exchanges & Clearing slipped 0.4%. The stock exchange operator's chief executive, Charles Li, on Friday said the recent arrest by the city's anti-graft agency of a former senior official in the exchange's listing department was a case of a "rotten apple" and pledged to support smaller enterprises seeking to go public, even if that meant increased risk.

Hong Kong's Independent Commission Against Corruption confirmed late on Wednesday it had arrested the former joint head of HKEX's IPO vetting team in the listing department, and two of his associates, for suspected corruption and misconduct related to the vetting of listing applications of two listed companies.

Lippo China Resources jumped 13.1%. The company, which has interests in property development and food distribution, on Friday reported a narrower net loss of HK$78.2 million for the year ending in March, compared with HK$122.4 million a year ago. Revenue for the year rose 3.5% to HK$2.48 billion.

Asia Satellite Telecommunications Holdings climbed 13.5% to HK$9.40 as it resumed trading after a week-long halt. The company said its controlling shareholder Bowenvale has proposed to privatize it, offering to buy out other shareholders at a price of HK$10.22 a share.

Media content distributor Medialink Group rose 2% following a 12.4% increase in net profit for the year ending March and a 51.5% jump in revenue.

Machines maker L.K. Technology Holdings slid 10.3% after reporting a 21% slump in profit for the year ended March.

Electrical and electronic products maker Kin Yat Holdings fell 9.1% following a 24.9% decline in profit for the year ending in March.

Property developer Chinney Investments declined 2.9% after its profit for the year ending in March more than halved from a year ago.

Handset maker SIM Technology Group slipped 3.2% following a forecast for a loss in the first-half of the year, compared with a profit in the year-ago period.

-- Amy Lam

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