Hong Kong stocks are set to rise slightly on Thursday as investors seek bargains amongst Chinese shares listed locally as mainland markets look poised to continue their outperformance relative to the region.

The benchmark Hang Seng Index .HSI fell 1.5 percent on Wednesday amid weakness in overseas markets hurt by turmoil in the Middle East, although light turnover suggested no rush for the exits.

Short-selling by hedge funds betting on further near-term weakness dominated trading activity with traders seeing few signs that long-only funds were dumping their positions.

With Chinese markets holding up relatively well, optimism over earnings growing and inflation fears subsiding, investors are looking for opportunities to pick up stocks at attractive valuations after last year's underperformance.

Elsewhere in Asia, Japan's Nikkei .N225 was up 0.5 percent while South Korea's KOSPI .KS11 rose 1.5 percent.

STOCKS TO WATCH:

* More than 50 percent of China Minsheng Banking Corp Ltd's new loans this year will be to small enterprises, continuing a trend from last year, said an official at China's seventh-largest bank.

* Guinean authorities sent security forces to stop RUSAL from exporting alumina from Conakry port on Wednesday, sources with knowledge of the company's operations said, but the Russian firm said operations had not been disrupted. The measure was taken due to a row over pollution caused by the firm's operations in the West African nation, the sources said.

* Profit at Standard Chartered (STAN.L) jumped 19 percent in 2010 and the Asia-focused bank said it was off to a record start this year as China, India and other Asian markets boomed.

* Metallurgical Corporation of China Ltd said its projects in Libya have been suspended as the situation in the country remains in turmoil and the outstanding value of the projects aggregates to about 5.131 billion yuan, accounting for about 2 percent of its total outstanding contract value as at the end of 2010. 

 * Evergrande Real Estate Group Ltd said it expected its net profit for 2010 to increase significantly as compared with a year ago.

* Florence-based Ferragamo, which has denied a media report about a possible plan to float in Hong Kong, said its family holding Ferragamo Finanziaria SpA had sold an 8 percent stake to long-time Hong Kong partner Peter Woo and his family. Woo is the chairman of Wharf (Holdings) Ltd.