* Vanke A and B shares hit 10 pct limit up
* B share index outperformed CSI300 since December
* Vanke following CIMC's successful migration in Dec
* Vanke's HK unit warns of significant profit decline
(Updates throughout, includes Vanke Properties Overseas' profit
By Pete Sweeney
SHANGHAI, Jan 21 Shares in China Vanke Co Ltd
shot up by their daily limit on Monday after the major property
developer said its foreign-currency B-shares would move to Hong
Kong, the second firm to have left the mainland's moribund
B-share market in Shenzhen.
Vanke's B-shares, which are denominated in Hong
Kong dollars, jumped 10 percent - the maximum intraday gain
mainland shares are allowed to post - to HK$13.75 ($1.77) per
share from the HK$12.50 at its last close on Dec. 25.
Its yuan-denominated A-shares also jumped 10
percent, while shares in its Hong Kong-listed subsidiary Vanke
Properties Overseas Ltd spiked 12.8 percent to their
highest close since Sept. 17.
Vanke Overseas shares have been climbing steadily on
expectations that its business would be reorganised if Vanke B
shares move to Hong Kong, where exchange rules require issuers
with two or more listed companies to guarantee they will not
compete directly with each other.
After markets closed on Monday, Vanke Overseas said it
expects a "significant decrease" in full-year net profit and net
assets in 2012, largely due to discontinued operations after
China Vanke's purchase in May of a 73.9 percent stake in the
company formerly known as Winsor Properties.
Trading in Vanke's Shenzhen shares has been suspended since
Dec. 26 pending an announcement. That finally came after markets
closed on Friday, when China's largest developer by revenue said
it would move its B shares to Hong Kong.
The positive response to Vanke's announcement follows the
successful migration of China International Marine Containers'
(CIMC) B shares to Hong Kong in December.
CIMC's new Hong Kong shares have gained over 26 percent
since their first day trading in Hong Kong on Dec. 19, compared
with a 6.5 percent rise in the China Enterprises Index
of top Chinese listings in Hong Kong.
It is also good news for Chinese regulators, who have
struggled to find a way to close down the B-share market, a
once-vibrant market for foreign investors in Chinese equities
that policy changes have rendered a little-traded
Chinese stock markets have rallied strongly since Dec. 26
when Vanke suspended trading, but B shares have outperformed the
broader onshore China benchmarks on what analysts have said is
optimism that other firms will be able to execute similar
The Shenzhen B-share index has now risen more than
18 percent since Vanke halted trading on Dec. 26. compared with
the 6.2 percent rise for the CSI300 of the top
Shanghai and Shenzhen A-share listings over the same period.
Chongqing Changan Automobile Co Ltd and glass
maker CSG Holding Co Ltd were also cited as
high-profile companies whose B shares meet Hong Kong listing
Changan Auto's B shares surged 8.8 percent on Monday while
CSG's climbed 4.9 percent.
($1 = 6.2154 Chinese yuan)
($1 = 7.7529 Hong Kong dollars)
(Additional reporting by Clement Tan in Hong Kong; Editing by
Edwina Gibbs and David Holmes)