* HSI +0.8 pct, H-shares +0.4 pct, CSI300 -0.7 pct
* ChiNext outshines major benchmarks this week, up 5 pct
* Macau Legend sinks after new share placement
By Clement Tan
HONG KONG, Jan 17 China shares neared
5-1/2-month lows early Friday, diverging from Hong Kong markets,
as the first initial public listing to debut in the mainland in
more than a year rose sharply, drawing money from large-cap
Neway Valve (Suzhou) Co Ltd, a major valve
maker, surged more than 30 percent in Shanghai, tripping circuit
breakers meant to contain price gains on debut days.
The halt in trading of Neway shares "evitably weighs on
sentiment, but I think the bigger problem today is the robust
demand for new listings suggested by some company announcements
released overnight," said Zhang Qi, a Shanghai-based analyst
with Haitong Securities.
At midday, the CSI300 of the largest Shanghai and
Shenzhen A-share listings was down 0.7 percent, while the
Shanghai Composite Index sank 0.6 percent to 2,012.3
points, flirting with key support seen at 2,000 points.
Earlier this week, both hit their lowest intra-day levels
since early August, a level they neared on Friday. They are
broadly flat on the week, extending a sluggish start to the year
on fears that new IPOs could divert funds from big-caps making
up market indexes.
This compares to the 0.7 percent climb so far this week on
the China Enterprises Index of the top offshore Chinese
listings in Hong Kong and the 1.5 percent gain for the Hang Seng
Index. On Friday, they were up 0.4 and 0.8 percent,
Still, all four major benchmarks trailed the nearly 5
percent gain for the Chinext Composite Index of
mainly technology startups listed in Shenzhen this week, as
investors looked to maximise returns with new listings
increasing competition for limited funds available.
Illustrating the strong demand for new IPOs, Yangzhou
Yangjie Electronic said its IPO was 72.3 times
oversubscribed in the tranche of shares it offered online.
Jiangsu Pacific Quartz became the latest to postpone
its planned Shanghai IPO.
Chinese financials were the top index drags in the offshore
markets. China Minsheng Bank slid 1.9
percent to its lowest in more than a year in Shanghai and shed 1
percent in Hong Kong.
As liquidity concerns persist, concerns about off balance
sheet issues have risen in the past week. Industrial and
Commercial Bank of China , the world's
largest bank by assets, had said on Thursday that it would not
assume the "main responsibility" for repaying investors in a
troubled off-balance-sheet investment product that it helped to
Macau Legend, which only listed in June after
reducing the size of its IPO, sank 4.6 percent after announcing
plans to raise $1.35 billion in a sale of as many as 188 million
new shares priced at a 7.8 percent discount to its Thursday
But there were gains for China COSCO Holdings
, whose shares climbed 5.3 percent in Hong
Kong and 2 percent in Shanghai after China's largest bulk
shipping company said on Thursday it returned to profit in 2013,
avoiding a possible A-share delisting after losses for two
China Oilfield Services surged 6.2 percent in Hong
Kong. Its H-shares have rebounded more than 7 percent after
closing on Tuesday at their lowest since end-October.