HONG KONG, Aug 28 (Reuters) - Hong Kong shares are expected to move higher on Friday, tracking strong overnight gains on Wall Street and a rebound in energy prices, but gains may be limited by continued concern over liquidity in the Chinese market amid a hefty supply of new shares.
Bank of China will be watched after the country's biggest foreign exchange lender posted a forecast-beating 10 percent rise in second-quarter profit as tight interest margins failed to offset a lending surge under Beijing's 4 trillion yuan economic stimulus package.
But the bank said it expected the pace of its lending to slow in the second half of the year, following explosive growth that saw its loans jump more than 30 percent in the first half.
The U.S. economy shrank less than expected in the second quarter and fewer workers filed new claims for jobless benefits last week, a sign the world's largest economy was starting to heal.
The benchmark Hang Seng Index dropped 1 percent in thin volume on Thursday as blue chips, including Esprit Holdings and CNOOC Ltd, were sold down after a weak showing in their results.
STOCKS TO WATCH-
* China COSCO Holdings, the country's largest shipping group, swung to a net loss in the first half, although slightly smaller than expected, and warned of a still tough second half amid continued economic and trade weakness.
* China COSCO said it would buy the 49 percent it did not already own in cargo terminal services provider COSCO Logistics from its indirectly controlled COSCO Pacific for 2 billion yuan. For statement please click http://www.hkexnews.hk/listedco/listconews/sehk/20090827/LTN20090827609.pdf
* China BlueChemical Ltd plans to invest up to 30 billion yuan ($4.39 billion) over the next five years to expand its fertiliser business, its chief executive said on Thursday.
* Tsingtao Brewery said it had entered into a strategic cooperation agreement with its substantial shareholder Asahi Breweries to develop the Chinese brewer's business. Asahi, which owns 19.99 percent of Tsingtao, will have the right to nominate one non-executive director and one supervisor to the company. For statement please click http://www.hkexnews.hk/listedco/listconews/sehk/20090827/LTN20090827301.pdf ----------------------MARKET SNAPSHOT @ 2244 GMT ------------
INSTRUMENT LAST PCT CHG NET CHG
S&P 500 <.SPX> 1030.98 0.28% 2.860
USD/JPY
MARKETS SUMMARY * Wall St gains on oil; Boeing, financials up [nN27334526] * Oil bounces back above $72 as Wall Street reverses [nSP475982] * Dollar hits multiweek lows vs yen, euro [nN27329657] * Treasuries dip; stocks outshine solid bond auction [nN2747086] (Reporting by Parvathy Ullatil; Editing by Chris Lewis)