Hong Kong, China shares fall on lower flash PMI, no word on 2014 plans

Sun Dec 15, 2013 11:52pm EST

* HSI -0.7 pct, H-shares -1 pct, CSI300 -1.5 pct

* Markets hurt by economic planning conference disappointment

* Gambling and technology sectors extend recent gains

* Power Assets jumps 2 pct on Hong Kong spin-off plan

By Yimou Lee

HONG KONG, Dec 16 (Reuters) - China shares extended losses on Monday, with Hong Kong shares lower too, after a preliminary survey showed manufacturing activity in the mainland slipped to an 3-month low in December.

China's leadership also disappointed both markets by not giving details of plans set at a long-awaited economic planning conference. Analysts had hoped Beijing would reveal its 2014 growth target and steps to boost urbanisation. China hopes 60 percent of its population will live in cities by 2020.

By midday, the Hang Seng Index was down 0.7 percent at 23,082.7 points, while the China Enterprises Index of the top Chinese listings in Hong Kong fell 1.0 percent.

The CSI300 dropped 1.5 percent, while the Shanghai Composite Index was down 1.4 percent at 2,164.74 points and appeared on track for a fifth straight daily loss.

"They have been talking about urbanisation for the whole year and we haven't really heard any concrete policies," said Jackson Wong, Tanrich Securities' vice-president for equity sales in Hong Kong.

"We will continue last week's trend - selling off before the year-end with funds flowing into stronger sectors such as gambling and technology for short-term trade," Wong said.

China said late on Friday that it hopes 60 percent of the population of almost 1.4 billion will be urban residents by 2020, but the statement issued at the end of a government conference didn't mention any new policies.

China's flash Markit/HSBC Purchasing Managers' Index (PMI) on Monday fell to 50.5 for December from November's final reading of 50.8, a three-month low as reduced output offset a pickup in new orders.

Chinese financials were broadly weak on Monday. In Hong Kong, Industrial and Commercial Bank of China (ICBC) was down 1.7 percent, while Ping An Insurance sank 2.1 percent.

Macau gambling and Chinese technology sectors extended their recent rally as investors chased gains, with Galaxy Entertainment up 2.7 percent to a record high and Sands China rising 1.1 percent.

Shares in electricity supplier Power Assets Holdings Ltd rose 2.0 percent after the company said it planned to spin off its Hong Kong business on the main board in Hong Kong at a market valuation of between HK$48 billion and HK$63.4 billion ($6.19 billion to $8.18 billion).

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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