China shares fall as investors prepare for IPOs, Hong Kong slips too

Mon Aug 25, 2014 12:53am EDT

* HSI -0.2 pct, H-shares -0.1 pct, CSI300 -0.9 pct

* Ten coming IPOs expected to lock up 900 billion yuan

* BYD drops up to 8.7 pct after H1 net profit falls sharply

* Sinopec rises as Q2 earnings beat forecast (Updates to midday)

By Grace Li

HONG KONG, Aug 25 (Reuters) - China shares slipped on Monday as investors set aside money for coming initial public offerings (IPOs), while the Hong Kong market also edged lower.

By midday, the Hang Seng Index inched down 0.2 percent to 25,065.73 points. The China Enterprises Index of the top Chinese listings in Hong Kong was off 0.1 percent.

The CSI300 of the leading Shanghai and Shenzhen A-share listings fell 0.9 percent, while the Shanghai Composite Index was down 0.5 percent at 2,229.86 points.

"The market is under relatively big pressure to consolidate in the short term, since there have been solid gains recently," said Wang Weijun, an analyst at Zheshang Securities in Shanghai.

"A major factor today is the IPO subscriptions which will start later this week, bringing liquidity pressure."

On Thursday and Friday, 10 out of the 11 IPOs which were approved last week will start taking subscriptions. That is expected to lock up 900 billion yuan ($146.33 billion) in funds, according to the Southern Metropolis Daily in Guangzhou.

Chinese banks suffered losses on Monday. Industrial and Commercial Bank of China slid 0.6 percent and smaller China Merchants Bank fell 1.1 percent.

Earnings reports aided some index heavyweights, including Sinopec Corp , which rose 1.7 percent in Shanghai and 2.5 percent in Hong Kong after beating forecasts with a 36 percent rise in second-quarter profit.

Sinopharm Group, China's largest drug distributor, rose 3.9 percent to a 17-month high after reporting first-half net profit rose to 1.47 billion yuan ($239.01 million) from 1.15 billion yuan a year ago.

In contrast, shares of carmaker BYD Co Ltd were hurt by a disappointing 16 percent drop in first-half net as sluggish sales of gasoline cars offset a surge in its electric vehicle business.

It finished the morning down 1.2 percent in Hong Kong - cutting early losses of 8.7 percent - and 2.4 percent in Shenzhen. BYD's H-shares are still up 28 percent this year, ahead of the H-share benchmark's 2.1 percent gain.

Subsidiaries of state-owned China Resources Holdings Co Ltd's fell after state media said its former audit director is being investigated by police in a matter related to state secrets.

China Resources Gas plunged 9.7 percent and China Resources Enterprise was down 3.2 percent. (1 US dollar = 6.1503 Chinese yuan) (Editing by Richard Borsuk)

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