5 percent after the announcement on Thursday

HSBC hurt by Goldman downgrade, third day of steep losses China China Comm Constr drops on World Bank ban of unit China banks climb after recent sharp falls (Updates to midday) By Parvathy Ullatil HONG KONG, Jan 16 (Reuters) - Hong Kong shares were slightlyhigher on Friday, bouncing off a seven-week low helped by arebound in Chinese financial counters, but shares in HSBC(0005.HK) slid to their lowest since 1999 after a second brokerdowngrade this week. China Communications Construction (1800.HK) dropped 4.5percent after the World Bank barred its unit for eight years onuncovering its involvement in a major cartel involving local andinternational firms bidding on a Philippines road project. Thestock dropped 5.5 percent after the announcement on Thursday. "CCC's overseas construction projects are mainly inundeveloped countries where the World Bank has been activelyinvolved in infrastructure development...it is not good for CCC'sreputation," said Citigroup's Jenny N Zhen. China's top builder of highways and ports on Friday deniedalleged engagement in collusive activities and said it believedthe World Bank allegation against its unit had no factual orlegal merit.

The Hang Seng Index .HSI ended the morning session 29.61points higher at 13,272.57, finishing off early highs as HSBCshares continued to slide.Goldman Sachs slashed the UK's top bank (HSBA.L) to a sellrating from neutral and slashed its target price to HK$49, lowerthan Morgan Stanley's cut to HK$52, which sparked a two-daysell-off in the stock The stock fell 3.3 percent to a ten-year low of HK$63.8. Mainboard turnover fell to HK$26.5 billion ($3.4 billion)from HK$27.2 billion by midday Thursday. "The local market may again return to the lows of recentmonths in the upcoming round of volatile movements, if theongoing fourth-quarter reporting season in the United States,alongside the forthcoming economic readings, adds to recessionfears," said Wilson Wong, analyst with Taifook Securities. Local property stocks also slipped amid concerns over slowingtransaction growth and falling prices. But shares in Hang Lung Properties (0101.HK) bucked the trendto rise 2.9 percent after J.P Morgan raised its stake in thedeveloper slightly to 4.98 percent by acquiring 1.89 millionshares. The China Enterprises Index .HSCE of top locally listedmainland firms climbed 1.5 percent to 7,144.20 helped by a strongrally in banking counters.

Top bank ICBC (1398.HK) gained 3.3 percent while No.2 lenderBank of China (3988.HK) added 3.1 percent. China's third largestlender, Construction Bank (0939.HK), climbed 4 percent. The deal will be settled by the issue of 2 billion new sharesat HK$2.6 each. (Reporting by Parvathy Ullatil; Editing by Jonathan Hopfner)(; 852 2843-6415)) ASIA-PACIFIC STOCK MARKETS: Pan-Asia......STXNEWS/ASJapan.........TS.Korea.....KS S.E. Asia.............SOHong Kong....HKTaiwan......TW Australia/NZ..........AXIndia........BOChina.......SS OTHER MARKETS: Wall Street............N Gold.........GOL/ Currency..FRX/Eurostocks............EU Oil...........O/R JP bonds...JP/ ADR Report..........ADR/ LME metals..MET/L US bonds...US/Stocks News US...STXNEWS/US Stocks News Europe...STXNEWS/EU DIARIES & DATA: IPO diary & dataAsia earningsdiary ASIA/EQTY U.S. earnings diaryRESF/US European diary WEU/EQTY Taiwan diaryTW/DIARYWall Street Week Ahead .N/O Eurostocks Week Ahead.EU/OWorld forecasts EQUITYPOLL1 TOP NEWS: For top Asian company news, double click on: nTOPEQA U.S. RICHMOND, Va.(Business Wire)Afton Chemical Corporation anuncia sus dos nuevas instalaciones de investigacióny desarrollo en la región Asia-Pacífico.