Hong Kong's H-share index nears 2014 high, China stocks firmer

Wed Jul 23, 2014 12:56am EDT

* HSI +0.7 pct, H-shares +1.9 pct, CSI300 +0.3 pct

* Securities firms rise on soaring profits in H1

* China Cinda jumps for a second straight day

* Gome at 2-month high after positive profit alert (Updates to midday)

By Grace Li

HONG KONG, July 23 (Reuters) - The index of major Chinese companies listed in Hong Kong surged early Wednesday, getting close to its 2014 peak, as investors particularly targeted financial and energy counters seen as undervalued.

Shares on mainland markets also strengthened following Tuesday's big rise, with insurers and brokerages leading index gains.

At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was up 0.3 percent to a 3-month high. The Shanghai Composite Index edged up 0.2 percent at 2,079.29 points.

The China Enterprises Index of the top Chinese listings in Hong Kong climbed 1.9 percent and is now at its highest since Jan. 2.

The Hang Seng Index was up 0.7 percent at 23,939.47 points.

"Valuations of H-share index companies are extremely low," said Jackson Wong, vice-president of Tanrich Securities.

He said with funds flowing into Hong Kong, investors are seeking stocks that pay high dividends.

Chinese brokerage firms outperformed after posting or flagging high profits in the first half, driven by the resumption of mainland initial public offerings and expansion into more areas of business.

CITIC Securities rose 3 percent in Hong Kong and 1.1 percent in Shanghai. The largest listed brokerage in China said on Monday its preliminary H1 net profit was up 93.2 percent from a year earlier.

Haitong Securities added 3.3 percent in Hong Kong and 2.3 percent in Shanghai.

The top percentage winner among H-shares was China Cinda Asset Management, which rose 5.1 percent following Tuesday's gain of 4.6 percent. It was the second most actively traded stock in Hong Kong on Wednesday morning.

Analysts attributed the rise of Cinda, which holds a large amount of distressed assets, to China's improving economic outlook.

Shares of GOME Electrical Appliances Holding surged 6.9 percent after the group said it expected first net profit to be more than double the year-earlier level.

Chinese insurers were index boosts. Ping An Insurance Group Co of China climbed 2 percent and China Life Insurance 1 percent. (Editing by Richard Borsuk)

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