(Updates to midday)
* HSI +0.2 pct, H-shares -0.4 pct, CSI300 +0.3 pct
* Esprit at lowest since August after fund raising plan
* China Coal climbs further after in-line Q3 earnings
* HKEx hits 6-mth high after HKMA intervened again to stem
By Clement Tan
HONG KONG, Oct 24 Mainland Chinese shares rose
on Wednesday, outperforming most Asian peers and lifting the
Hong Kong market to just short of a year-high after a survey of
purchasing managers showed China's economy making a steady
The Hang Seng Index ended the morning session up 0.2
percent at 21,736.5, below the current intra-day 2012 high of
21,760.34 recorded on Feb. 29. If it holds onto gains at the
close, this will be the benchmark's ninth-straight daily gain,
equalling a winning streak recorded in June 2010.
The China Enterprises Index of the top Chinese
listings in Hong Kong was down 0.4 percent.
The CSI 300 Index of the top Shanghai and Shenzhen listings
rose 0.3 percent, while the Shanghai Composite Index
gained 0.4 percent. Both traded in the same 70-point range they
have been trading between for more than two weeks.
A rise in the HSBC Flash Manufacturing Purchasing Managers
Index for China to a three-month high of 49.1 in October with
gains in new orders and output helped bolster confidence in the
world's second-largest economy.
"Talking to my clients, it seems their pessimism on China is
ebbing," said Edward Huang, equity strategist with Haitong
"Incoming fund flows are sure to further buoy Hong Kong
markets further, with local developers and Chinese
construction-related plays likely to see further short-term
buying interest," Huang added.
China Coal Energy Co Ltd rose 2.2 percent in Hong
Kong and 0.6 percent in Shanghai after a 22 percent decline in
third-quarter net profit was largely in line with expectations.
After lagging the broader Hong Kong market for much of this
year, shares of China's second-largest coal producer are now up
almost 11 percent in October after jumping almost 10 percent in
It is now down 6.3 percent for the year, compared to the
Hang Seng Index's 18 percent gain and the China Enterprises
Index's 7.7 percent rise. China Coal currently trades at
a 47 percent discount to its historic median price-to-book
value, according to Thomson Reuters StarMine.
Expectations of more capital flows into Hong Kong lifted
shares of the Hong Kong Exchange, which rose 2.2
percent to its highest since late April. Shares of the bourse
operator have now gained 9.6 percent this month after jumping
13.8 percent in September.
The territory's defacto central bank was forced to step into
the currency market twice on Tuesday to weaken the Hong Kong
dollar, following a similar move over the weekend after
it pushed against the top-end of its trading band.
The Hong Kong property sector was also strong, with Cheung
Kong Holdings and Sun Hung Kai Properties
each jumping almost 3 percent.
ESPRIT, CHINA OIL MAJORS KEY DRAGS
Weakness in fashion retailer Esprit Holdings
limited gains in Hong Kong. Esprit plunged 12.4 percent after it
announced plans to raise $677 million to fund a restructuring of
its key businesses.
This involves a new share issue, which, at HK$8 per share,
is a 36 percent discount to its Monday's close. Hong Kong
markets were closed for a public holiday on Tuesday. Esprit
shares are currently trading at HK$12.38.
Losses on Wednesday brought Esprit's share price to its
lowest since Aug. 6, almost paring gains after the company
appointed an executive from larger rival Inditex as
its new CEO.
Chinese oil majors were also key drags on lower oil prices.
In Hong Kong, CNOOC Ltd slipped 1.6 percent, while
PetroChina lost 1.8 percent and China Petroleum &
Chemical Corp (Sinopec) shed 1.4 percent.
(Editing by Sanjeev Miglani)