HK, China shares gain with financials at the helm

* Plan to transfer shares to pension fund helps China stocks

* Financials rise in HK, China on loan report

* New listings in HK outperform broad market (Updates to close)

By Parvathy Ullatil & Claire Zhang

HONG KONG/SHANGHAI, June 22 (Reuters) - Financial stocks perked up in Hong Kong and China, lifting the broader markets on Monday, on news that new lending on the mainland picked up pace in June.

In other positive news, China on Friday said state-owned companies that sold shares after the government initiated share-structure reforms in late 2005, and those that would do so in future, must give a 10 percent stake for free to the national pension fund.

Stakes in major state companies including China Construction Bank (0939.HK), China Life Insurance Co (601628.SS)(2628.HK) and Ping An Insurance (2318.HK) (601318.SS) will be held by the pension fund for at least three years. [ID:nSHA73873]

The move was seen as part of the Chinese regulator's share market reform plan and was expected to lend stability to the market as pension funds were likely to be long term investors, said analysts.

"What this says is that the Chinese government will continue to do its bit towards supporting the market and stimulating the economy, which in turn will benefit their banks and insurers," said Sun Hung Kai Financial strategist Castor Pang.

IPO DOUBLE WHAMMY IN HK

The benchmark Hang Seng Index .HSI ended up 0.8 percent at 18,059.55, off early highs, as caution prevailed ahead of the U.S. Federal Reserve meeting on interest rates later in the week.

Two initial public offerings in Hong Kong -- a scrap-metal recycler and a furniture maker -- drew strong interest on their debuts on Monday in a market seeking fresh catalysts ahead of mid-year reports by fund managers.

"Its the right time with all the hot money flooding the market and investors ready to chase pretty much anything. Some of these stocks are good concept stocks, while others have timed their issue well," said BOCI Research vice-president Peter Pak.

Turnover slipped to HK$62.7 billion from HK$62.9 billion on Friday.

The China Enterprises Index .HSCE, which represents top locally listed mainland Chinese stocks, was up 1.2 percent at 10,638.80.

Top lender ICBC (1398.HK) was up 3.3 percent and Bank of Communications (3328.HK) jumped 4.8 percent to HK$7.80. China's No.2 lender Bank of China (3988.HK) advanced 2 percent to HK$3.56.