* HSI +1.0 pct, H-shares +0.5 pct, CSI300 +0.4 pct
* High yielding counters lead HK rebound from oversold
* H-share index set to snap 11-day losing streak
* Chalco dives to 4-1/2-year low ahead of HSCE exclusion
By Clement Tan
HONG KONG, June 14 Hong Kong shares rebounded on
Friday from an eight-month closing low the previous day, led by
high yielding counters recently battered by worries that the
U.S. Federal Reserve would taper monetary stimulus.
Mainland Chinese markets had a comparatively tepid rebound
from six-month lows as money rates stayed tight. Technology and
pharmaceutical counters, outperformers on the year, led index
By midday, the CSI300 of the leading Shanghai and
Shenzhen A-share listings was up 0.4 percent after ending
Thursday at its lowest since December. The Shanghai Composite
Index inched up 0.2 percent.
The Hang Seng Index climbed 1 percent to 21,093.5
after closing on Thursday at their lowest since October. The
China Enterprises Index of the top Chinese listings rose
0.5 percent in what could be its first daily gain in 12 days.
Gains on Friday helped lift the H-share index from its most
technically oversold level in almost two years but it is still
down 4.4 percent this week. The Hang Seng benchmark is down 2.2
percent. Both are headed for their fifth-straight weekly loss.
Onshore China markets, trading only two days this week, are
set for a second weekly loss. On the week, the CSI300 is down 3
percent, while the Shanghai benchmark is down 2.6 percent.
"Whether Thursday's low is the bottom in this sell-off is
not as important as the fact that investors should now be taking
this time to accumulate some quality names," said Larry Jiang,
chief investment strategist at Guotai Junan International
On Friday, Hong Kong property developers were among the
leading percentage risers among benchmark components. New World
Development shares jumped 3.7 percent from Thursday's
nine-month closing low.
New World's shares have now fallen 20 percent from a high on
May 8 and are trading at a 31 percent discount to its historical
forward 12-month earnings before Friday, according to Thomson
After markets close on Friday, Galaxy Entertainment
will take Esprit's place on the Hang Seng
Index, while PICC Group will replace Aluminum
Corporation of China (Chalco) on the China Enterprises
In Hong Kong, Galaxy climbed 2.4 percent, Esprit gained 1.4
percent, PICC Group rose 2 percent, while Chalco dived 4.6
percent to its lowest since November 2008. Trade in these
counters could spike as markets close for the day as passive
funds based on these indexes adjust their holdings.
CASH SQUEEZE IN CHINA
Most banking names were weaker in the mainland as a cash
crunch lingered, with China's Ministry of Finance failing for
the first time in nearly two years to sell all of the 15 billion
yuan worth of nine-month bills.
In Shanghai, China Merchants Bank slid 1.2
percent, while China Construction Bank (CCB) slipped
0.6 percent. The two largest listed Chinese brokerages, Citic
Securities and Haitong Securities were
Official Chinese newspapers on Friday blamed Thursday's
steep losses on hot money flows. A Shanghai Securities News
report, citing the views of an economist with Galaxy Securities,
said that a rate cut was no solution to stopping those flows
which were being underpinned by yuan appreciation prospects.