Hong Kong shares rebound but China set for worst week since April

Fri Jun 20, 2014 12:54am EDT

* HSI +0.2 pct, H-shares +0.5 pct, CSI300 -0.2 pct

* H-shares at largest premium over A-shares in eight years

* Gold stocks rise on price hike this week

* China Oil and Gas at 2-month high after acquisition deal (Updates to midday)

By Grace Li

HONG KONG, June 20 (Reuters) - Hong Kong stocks bounced back on Friday as the beaten-down Macau gaming sector rebounded, but China shares looked set for their fourth straight losing session amid a spate of new intitial public offerings.

By midday, the Hang Seng Index was up 0.2 percent at 23,218.86 points, but still down 0.4 percent on the week due to losses in the previous four days.

The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.5 percent. It has lost 1.1 percent on the week and is set for its first weekly loss in six.

On the mainland, the CSI300 of the leading Shanghai and Shenzhen A-share listings slipped 0.2 percent lower, while the Shanghai Composite Index was down 0.5 percent at 2,013.09 points.

The declines took their losses for the week to 2.8 and 2.4 percent, respectively, which would mark their worst week since April 25.

The resumption of IPOs in the mainland has attracted huge demand after a four-month hiatus on offerings, locking up a large amount of funds and prompting investors to sell some of their other holdings to raise cash to chase the new listings.

The first four companies to pursue listings attracted a combined 380 billion yuan ($61.20 billion) of bids, the China Securities Journal reported.

Auto parts maker Shanghai Lianming Machinery attracted interest around 515 times the amount on offer in the online portion of its sale.

"The new IPOs shouldn't have too big an impact on the indexes, as new issuings will come at a steady rate," said Zheng Weigang from Shanghai Securities.

The China Securities Regulatory Commission is planning about 100 IPOs for the rest of this year, its chairman said last month. Ten IPOs have been approved.

Zheng added the index futures settlement was another factor in the drop of 1.6 percent on the Shanghai benchmark on Thursday.

Among the biggest drags in Shanghai, Qingdao Haier lost 3.8 percent, while Yonyou Software dropped another 4.1 percent, following Thursday's plunge of the maximum allowed 10 percent, to a one-month low.

Gold shares rose, with Shandong Gold and Zhongjin Gold each up more than 2 percent. The safe-haven metal is set for its best week in three months on geopolitical tensions and a softer dollar.

In Hong Kong, Macau casinos were the biggest boosts to the Hang Seng. Sands China rose 3.1 percent while Galaxy Entertainment Group gained 2.7 percent.

China Oil and Gas Group rose 1.5 percent to its highest since April 14, after the company announced acquisition of an oil and gas company in Canada. The sector has seen heavy selling in recent months on fears of slower revenue growth.

The divergence of the performance in the Chinese onshore and offshore markets recently has left the Hang Seng China A-H Premium Index back at its lowest since May 2006, suggesting H-shares are now trading at their biggest premium over A-shares in more than eight years. ($1 = 6.2090 yuan) (Editing by Kim Coghill)

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