(Corrects headline and 1st paragraph to reflect weekly gain for
* HSI +0.3 pct, H-shares flat, CSI300 -0.5 pct
* Most indexes set for 2nd straight weekly loss, HSI could
* Brokers fall on signs of A-share IPO resumption could slow
* GCL-Poly tumbles after China wealth fund trims stake
By Clement Tan and Alice Woodhouse
HONG KONG, Jan 10 China shares sank to more than
five-month lows early on Friday as trade data failed to inspire
investors, while strength in Hong Kong property counters helped
the Hang Seng Index eke out a slim weekly gain ahead of U.S.
jobs data later in the day.
Most benchmark indexes were headed for their second-straight
weekly loss as investors fretted over how the resumption of
A-share initial public offerings after a halt of more than a
year will inject more competition for funds at a time of
tightening money supply in the mainland.
At midday, the Hang Seng Index was up 0.3 percent at
22,859.4 points, and was slightly positive on the week, while
the China Enterprises Index was trading flat after
earlier testing its lowest intra-day level since early
The Shanghai Composite Index and the CSI300
of the biggest Shanghai and Shenzhen A-shares both
shed 0.5 percent, with the former just holding above the
2,000-point mark. They are now at their lowest levels since
The Shanghai benchmark has made its worst start to a year
since 2002, losing nearly 5 percent in the first seven sessions
of the year. The H-share index also has underperformed, falling
6.2 percent over the same period.
"The equity markets seem to be pricing in rather quickly
expectations of slower China growth," said Erwin Sanft, Standard
Chartered's head of Hong Kong-China research.
Official data on Friday showed China's export growth slowed
more than expected in December due to a higher comparison base a
year earlier and a clamp-down on speculative activities
disguised as export deals, missing the official target on
Imports grew more than expected, however, raising optimism
that domestic demand remained firm.
Bu with Beijing showing signs that it is ramping up the pace
of financial reform, which involves tighter oversight of shadow
banking activities and debt levels, investors are now bracing
for slower growth in the world's second-largest economy.
The official China Securities Journal reported on Friday
Chinese Premier Li Keqiang as saying the government's audit work
this year would focus on the fiscal and financial sectors to
detect any possible risks.
In another report, the same newspaper also quoted industry
sources as saying that Chinese banks are unlikely to
"front-load" lending activity at the start of the year as they
had in previous years after the central bank tightened loan
Financial counters were weak on Friday, with brokerages
leading losses after Chinese drug maker Jiangsu Aosaikang
Pharmaceutical Co Ltd said it will postpone its
initial public offering until an appropriate time because "the
proposed issuance was too big."
This comes a day after the 21st Century Business Herald
newspaper reported that the China Securities Regulatory
Commission has asked some companies to slow down their IPO
Shares of Haitong Securities , China's
second-largest listed brokerage, dived 3.1 percent in Hong Kong
and 2.1 percent in Shanghai. Citic Securities
sank more than 1 percent in Hong Kong and
Cosmetics retailer Sa Sa International Holdings Ltd
tumbled 6.9 percent in what could be its biggest
single-day loss in nearly 10 months after posting 17.4 percent
growth in third-quarter sales in Hong Kong and Macau, short of
Wind and solar energy firm Huaneng Renewables Corp Ltd
shares dived 6.7 percent after it reported power
generation figures for 2013 that missed expectations.
China's top polysilicon producer GCL-Poly Energy Holdings
Ltd sank 6.2 percent on news that Chengdong Investment
Corp, a subsidiary of sovereign wealth fund China Investment
Corp, planned to trim its stake in the company.
Henderson Land led gains in the Hong Kong property
sector, rising 2.7 percent. After the stock lost 11 percent in
2013, market watchers say its valuation was now looking
attractive given that developers are starting to offer discounts
to keep up home sales volumes.
(Editing by Kim Coghill)