* HSI +0.9 pct, H-shares +0.7 pct, CSI300 +2.8 pct
* BoCom leads bank gains on plans to seek more private
* Hong Yuan Securities surges after trade resumes
* HKEx says no launch date decided for stock connect
(Adds details, prices)
By Grace Li
HONG KONG, July 28 China shares jumped on
Monday, with Hong Kong's index hitting its highest close in more
than 3-1/2 years, on growing bets that the world's
second-largest economy has turned a corner and as investors
expect more growth-friendly policies.
Helped by some ultra cheap valuations, banks soared after a
Reuters report said the country's fifth-biggest bank by assets
planned to seek more private investors.
The Hang Seng Index closed up 0.9 percent at
24,428.63 points at its highest since November 2010. The China
Enterprises Index of the top Chinese listings in Hong
Kong rose 0.7 percent at its highest close since December 11.
The CSI300 of the leading Shanghai and Shenzhen
A-share listings jumped 2.8 percent, while the Shanghai
Composite Index gained 2.4 percent to 2,177.95 points.
The jump put the onshore share indices squarely in the black
for the first time this year after a disappointing recent
The rally in the markets which began last week gathered
steam on Monday and has been helped by a slew of recent
optimistic news which has propped up emerging market indices.
Better-than-expected China July HSBC flash PMI, lower
financing costs, loosening curbs on property policies and the
coming investment connection between the Shanghai and Hong Kong
stock markets were cited as factors behind the rally.
Both onshore indexes closed at their highest this year in
their best day since March 21. Gains in Shanghai came in the
strongest bourse volume since September.
China's Bank of Communications Co Ltd (BoCom)
plans to sell stakes to private investors under a
government reform aimed at letting private capital play a bigger
role in the economy, two people familiar with the matter told
Reuters on Friday.
BoCom jumped 9.9 percent in Shanghai, its biggest daily gain
since September 2013. Its Hong Kong listing was the top
percentage gainer on the Hang Seng, up 6.2 percent to an almost
"The impending plan is likely to change the previous
structure. It will allow non-state capital to enter the
management levels," said Chen Xingyu, an analyst from the
Shanghai branch of Phillip Securities (Hong Kong) Limited.
"When it's changing structure, investors are also
anticipating details of the stock incentive plans which will be
introduced at the management level," said Chen, who added such a
change would link management's dividends and salaries far more
closely to the banks' development, which will boost efficiency
at state banks.
The sector was further supported by the issuance of
preference shares by the country's biggest lender Industrial And
Commercial Bank Of China , which helped
relieve fears of dilutive common capital raisings as Chinese
banks rush to replenish their balance sheets to meet new global
The Shanghai financials sub-index added 4.2
percent, its biggest rise in fourth months. Hong Kong and
Shanghai listings of China's "Big Four" banks all rose between 1
and 3.5 percent.
Top index boost Tencent rose 3.2 percent. It won
approval from China's banking regulator late on Friday to set up
a bank in the Qianhai economic zone in southern China's
Guangdong province with two local firms.
Hong Yuan Securities soared the maximum allowed
10 percent after trade resumed on Monday. The firm said late on
Friday its management had agreed to be bought by Shenyin &
Wanguo Securities for 39.6 billion yuan ($6.40 billion),
creating China's third-biggest brokerage.
Shares of brokerage firms were also bolstered by a
National Business Daily report, which said the launch date for
the Hong Kong-Shanghai Stock Connect scheme has been set for
Oct. 13, allowing direct investment between the two markets for
the first time.
The mainland's two largest-listed names in the sector -
CITIC Securities and Haitong Securities
- both spiked more than 4 percent.
But Hong Kong Exchanges and Clearing clarified on Monday
afternoon there was not an explicit launch date yet.
($1 = 6.1860 Chinese yuan)
(Additional reporting by Engen Tham in Shanghai; Editing by
Saikat Chatterjee & Kim Coghill)