(Corrects headline and first paragraph to say Monday was a
17-week high, not 17-month)
* HSI -0.3 pct, H-shares -0.4 pct, CSI300 -0.8 pct
* Cyclicals weak ahead of expected Fed tapering decision
* Wing Hang Bank leads Hong Kong up after takeover offer
* Prada slips ahead of interim earnings
By Clement Tan
HONG KONG, Sept 17 Hong Kong shares slipped from
a 17-week high in early Tuesday trade, with mainland Chinese
markets also weaker, ahead of a U.S. Federal Reserve meeting
where it is widely expected to start cutting its stimulus.
Wing Hang Bank bucked index weakness, leading
gains among Hong Kong banks after it said controlling
shareholders have received preliminary offers from independent
third parties to purchase their $3.3 billion stake.
At the midday break, the Hang Seng Index was down 0.3
percent at 23,189.2 points after closing on Monday at its
highest since May 22. The China Enterprises Index of the
top Chinese listings in Hong Kong slipped 0.4 percent.
The CSI300 of the leading Shanghai and Shenzhen
A-share listings sank 0.8 percent, while the Shanghai Composite
Index shed 0.9 percent.
If losses hold, this will be the third-straight daily fall
for the mainland indexes, which closed at 14-week highs on
Thursday. Both are still up 7.5 percent from a trough on Aug.
23, the day after Beijing approved a Shanghai free trade zone.
Official data in the morning showed China drew $8.4 billion
in foreign direct investment in August, up 0.6 percent from a
year ago. Data for August home prices is due on Wednesday.
Market watchers expect mainland markets to stay on the
defensive ahead of the Mid-Autumn Festival holiday this Thursday
and Friday. Hong Kong will be closed on Friday for the holiday.
"It's a waiting game at the moment, but the FOMC decision
may not necessarily be a bad thing," said Linus Yip, a
strategist at First Shanghai Securities. He was referring to the
Federal Open Market Committee, the policymaking arm of the U.S.
"Tapering stimulus also means the U.S. economy is
recovering, which I suspect some smart money has started to
position for," Yip added. The Fed is expected to release its
decision at 1800 GMT Wednesday.
On Tuesday, growth-sensitive plays were broadly weaker.
Chinese oil giant CNOOC shed 1.5 percent as Brent
crude oil futures edged lower after recording its sharpest drop
in three months on Monday.
Chinese banking plays, which had powered the rally in the
first half of September, again were weaker. Shanghai Pudong
Development Bank sank nearly 3 percent. Still, the
stock is up almost 33 percent since Aug. 23.
Shenzhen-listed China Merchant Property tumbled
8.2 percent as trading resumed after being suspended on Aug. 7.
Official media reported that the developer plans to issue 181
million new shares to raise about 6.5 billion yuan to acquire
Shekou Industrial Zone.
Wing Hang Bank surged 40.2 percent, earlier testing a record
high intra-day level, after becoming the second Hong Kong
family-run bank to receive a takeover offer in as many months.
Its gain lifted the shares of rivals.
Shares of Chong Hing Bank, the first to have
gotten an offer, climbed 2.5 percent, while Dah Shing Bank
surged 18.6 percent and its majority stakeholder Dah
Shing Financial Holdings 9.5 percent. Bank of East
Asia rose 3.8 percent.
Italian luxury brand Prada lost 0.6 percent ahead
of its earnings later Tuesday. It is expected to report a 12
percent rise in profit for the six months ended July, largely
due to sales growth in China, which analysts see at almost 12
Prada, up 7.8 percent year to date, is now trading at 23.4
times forward 12-month earnings, a 7 percent premium to its
historical median, according to Thomson Reuters StarMine.
Kingway Brewery said it will distribute a special
dividend of HK$1 per share after completing the sale of brewery
assets. It said trading in the stock, suspended on Monday
morning, will resume in the afternoon.
(Additional reporting by Donny Kwok; Editing by Richard Borsuk)