Hong Kong, China shares rise led by financials, property

Mon Jan 14, 2013 12:45am EST

* HSI 0.7 pct, HSCE 1.5 pct CSI300 3.2 pct

* Air pollution lifts energy and healthcare

* Earnings, policy optimism boosts property and financials

* Li & Fung falls 2 pct on weak earnings

SHANGHAI, Jan 14 (Reuters) - Chinese shares in Hong Kong struck a fresh 52-week-high on Monday, and mainland indexes jumped by more than 2.5 percent led by financials and property, which gained on a media report that the roll-out of a pilot property tax scheme could be delayed.

Another feature of the mainland markets were gains made by healthcare stocks and some large-cap energy stocks after air quality in Beijing on Saturday was said by environmentalists to have been the "worst on record", and the city's pollution monitoring centre warned residents to stay indoors. Other northern Chinese cities were also affected.

Hang Seng Index was up 0.7 percent at 23,426.96 points

By 1.15 p.m. (0315 GMT), te China Enterprises Index of top Chinese listings in Hong Kong was up 1.5 percent at 12,023.27 points, setting a fresh 52-week high, whereas the Hang Seng Index was up 0.7 percent at 23,426.96 points

The CSI300 of the top Shanghai and Shenzhen listings rose 3.2 percent, while the Shanghai Composite Index rose 2.5 percent.

Banking shares gained strongly in both Hong Kong and Shanghai, with HSBC climbing one percent. Insurer China Life was up 3.85 percent in Hong Kong and 4.33 in Shanghai, and ICBC was up one percent in Hong Kong and 1.4 percent in Shanghai.

"Banking stocks are seen quite strong as investors put a bet on the sector on hope of good growth in earnings on the improving economic environment, in particular tracking a solid gain in the Shanghai market," said Alfred Chan, chief dealer at Cheer Pearl Investment.

Despite a strong tone in the main index, companies that posted profit warnings were under pressure.

Global supply chain manager Li & Fung fell 2 percent to its lowest level in three months after it warned of a steep drop in core operating profit, taking investors by surprise and triggering concern over its ability to reach a three-year earnings target.

China's largest polysilicon and wafer maker GCL-Poly Energy Holdings Ltd fell 4.25 percent after it announced a substantial expected loss in 2012 due to anti-dumping and countervailing duties imposed by the U.S., the impact of the European debt crisis on solar farms financing, and impairment and provisions against inventory and production facilities.

Shares of Citic Telecom International Holdings Ltd had their biggest one-day percentage gain in more than two years on Monday after striking a $1.2 billion deal to gain control of a Macau telecommunications company from Cable & Wireless Communications Plc and Portugal Telecom SGPS SA.

FINANCIALS, PROPERTY SURGE ON MAINLAND

The air pollution in north China over the weekend boosted energy shares, as investors bet that pollution-related policies would lead big, listed companies to profit at the expense of smaller players that could be harder hit by new regulations.

China Shenhua Energy rose 1.3 percent, while PetroChina rose 1.68 percent.

The healthcare sub-index gained 2.8 percent as consumers are expected to look for ways to protect themselves.

Apart from air pollution, a better-than-expected earnings preview from Industrial Bank on Friday and a strong fourth-quarter earnings release from Poly Real Estate on Sunday night boosted sentiment towards the mainland financial and real estate sectors.

The mainland property sub-index rose 3.39 percent, while financials were up 3.6 percent.

Also affecting real estate shares was comments from a senior official in China's State Administration of Taxation, reported in mainland media, that China is likely to delay the expansion of its property tax pilot project to more cities beyond Shanghai and Chongqing.

The Ministry of Land Resources said it would continue to ensure sufficient land supply to prevent against big rises in land prices that could feed through to home prices. That boosted real estate shares by easing investor fears that spiraling land costs would hit developers' bottom line.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.