September 12, 2013 / 4:51 AM / 4 years ago

Hong Kong, China shares edge higher, shipping firms stronger

* HSI +0.2 pct, H-shares +0.4 pct, CSI300 +0.5 pct

* China shippers rise again, Baltic Dry Index extends surge

* Sun Hung Kai Properties up ahead of earnings

By Clement Tan

Sept 12 (Reuters) - Hong Kong and China shares crept higher early Thursday, led by Chinese financial and shipping counters as an index of freight costs kept raising in another sign the global economy is on the mend.

At midday, the CSI300 of the leading Shanghai and Shenzhen A-share listings was up 0.5 percent, while the Shanghai Composite Index inched up 0.1 percent and was at its most technically overbought level since October 2010.

The Hang Seng Index rose 0.2 percent to 22,993 points. The China Enterprises Index of the top Chinese listings in Hong Kong climbed 0.4 percent, and has soared almost 21 percent from a June 25 trough.

"We are still in a relatively early stage of this rotation back into Chinese equities because not every fund manager has the flexibility to make changes too quickly," said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities.

Some of the gains for shipping stocks reflect "a reversal of the steep losses the sector suffered over the past months," he added.

The Baltic Dry Index jumped 5.7 percent on Wednesday to its highest since Dec. 23, 2011 and has leaped 63.5 percent since an Aug. 12 trough. China Shipping Container Lines (CSCL) surged by the 10 percent maximum limit in Shanghai, but a more modest 0.9 percent in Hong Kong.

Rising cement prices, along with hopes that the bigger players will benefit from industrial consolidation, helped lift China National Building Material (CNBM) 3.1 percent to its highest since Aug. 15.

Deutsche Bank analysts, in a note on Thursday, said that cement prices are rising in southern Guangdong province, with more hikes expected as the sector enters a season of peak demand in the fourth quarter.

Sun Hung Kai Properties climbed 1.1 percent ahead of its annual earnings later in the day. The stock, down 10.8 percent in 2013, is now trading at a 25.6 percent discount to its 12-month forward earnings, according to Thomson Reuters StarMine.

China coal counters sank after Beijing unveiled comprehensive measures to tackle air pollution on Thursday that involves slashing coal consumption and closing old polluting steel mills, cement factories and aluminum smelters.

China Shenhua Energy Co Ltd fell 2.8 percent in Hong Kong and 1 percent after closing at its highest in nearly three months in Shanghai.

Sino Biopharmaceutical shares plunged by as much as 25 percent to their lowest since February and were down 16.5 percent when trading was suspended shortly before the midday break.

The company said it has set up a team to investigate allegations broadcast on state television that its majority-owned subsidiary had paid for illegal overseas trips for doctors.

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