* HSI -0.8 pct, H-shares -1.4 pct, CSI300 -2.2 pct
* Industrial Bank may have halted property loans- official
* China Vanke tests 5-year low; cement, banks dive too
* Belle International soars after improved 2013 earnings
By Clement Tan
HONG KONG, Feb 24 China shares suffered their
biggest loss in seven weeks on Monday, hurting Hong Kong
markets, after mainland news reports stoked fears that banks
have tightened loans to property developers.
Monday's losses, which erased a recent rebound for Chinese
property shares, were rooted in fears of new moves by
authorities in their four-year campaign to rein in risks of a
possible asset-bubble as home prices have surged.
"I would get out of interest rate-sensitive sectors. It's
very hard to navigate right now with policy risk on the rise,"
said Hong Hao, Hong Kong-based chief equity strategist at Bank
of Communication International.
"Property prices in many cities are still rising and that's
not a good sign coming ahead of the annual parliamentary
meetings," Hong added.
Those meetings are due to start March 5 in Beijing.
The Shanghai Composite Index finished down 1.8
percent, while the CSI300 of the biggest Shanghai and
Shenzhen A-share listings sank 2.2 percent. For both, this was
their largest one-day loss since Jan. 6.
The China Enterprises Index of leading Chinese
listings in Hong Kong slid 1.4 percent. The Hang Seng Index
sank 0.8 percent to 22,388.6 points, slipping back below
its 200-day moving average, which it held for most of last week.
All four indexes finished off the day's lows, and volumes
slowed in afternoon trade. In Shanghai and Hong Kong, losers
outnumbered gainers about 2-1.
China Vanke, the largest property developer by
sales, dropped 6.6 percent in Shenzhen after plumbing its lowest
in more than five years. Poly Real Estate slumped
8.5 percent in Shanghai, whose property sub-index slid
5.4 percent, its biggest loss in eight months.
Country Garden and Shimao Property
tanked 8.3 and 7.8 percent, respectively. Blue chip China
Resources Land dived 5.7 percent.
The official Shanghai Securities News reported on Monday
that Industrial Bank and other banks may have
stopped extending some loans to property developers and
tightened lending to other property-related sectors such as
steel, cement and construction.
Local media reported several banks issued denials. Mid-sized
Industrial Bank did not respond to calls from Reuters seeking
comment, but Bank of America-Merrill Lynch China economists said
the types of financing stopped should account for only a small
part of Industrial Bank's property-sector exposure.
Still, Industrial Bank shares declined 3.7 percent in
Shanghai, while China's biggest cement producer Anhui Conch
Cement tumbled about 5 percent in both Hong
Kong and Shanghai.
In January, average new home prices in China's 70 major
cities rose 9.6 percent from a year earlier, easing from the
previous month's 9.9 percent rise, according to Reuters
calculations based on data released by the National Bureau of
Statistics (NBS) on Monday.
In a front page editorial on Monday, the official China
Securities Journal said that unusually high investment in
China's property market over the past decade will "for certain"
cool as part of the broader slowdown in the world's
Shares of China-focused shoe retailer Belle International
surged almost 6 percent in Hong Kong after it said
2013 net profit rose 3.2 percent. That buoyed rival Daphne
International, whose shares rose 4 percent.
HSBC Holdings shares slipped 0.5 percent
in Hong Kong ahead of its 2013 full year profit after market
close, which at $22.6 billion was lower than expected. Its
London shares were down 4.7 percent at 0850 GMT.
In the last 30 days, nine of 31 analysts downgraded their
2013 earnings-per-share estimates for HSBC by an average of 5.5
percent, according to StarMine.