(Updates to midday)
* HSI down 0.1 pct, CSI300 slips 0.8 pct
* Midday turnover miserable, nears 2012 lows in both markets
* Tencent slumps, profit taking on recent outperformers
* Yanzhou Coal hit by Goldman downgrade
By Clement Tan
HONG KONG, Aug 13 Hong Kong shares drifted
slightly easier on Monday in thin morning trade, with falls led
by Chinese internet giant Tencent Holdings as investors took
profits on last week's outperformers ahead of earnings results
out this week.
Chinese property counters were weak after the official
Shanghai Securities News reported that Beijing may hold local
governments accountable for failing to implement property curbs.
The Hang Seng Index went into the midday break down
0.1 percent, retreating a tocuh further from a three-month high
set last Thursday.
The CSI300 Index of the top Shanghai and Shenzhen
listings fell 0.8 percent, while the Shanghai Composite Index
shed 0.5 percent, with Shanghai volumes nearing lows for
"It's quite quiet today," said Jackson Wong, Tanrich
Securities' vice-president for equity sales. "People are taking
some profits, cutting risk after the run up last week
Tencent Holdings shed 2.6 percent, slipping
further from a near two-month high on Thursday ahead of its
first half earnings, expected after markets close on Wednesday.
It is still up more than 45 percent this year to date
Citi analysts advised investors to buy into the results,
which they expect to be "resilient" to the slowdown in China.
Tencent is currently trading at 23 times forward 12-month
earnings, a 15 percent discount to its historical median,
according to Thomson Reuters StarMine.
Underwhelming China macroeconomic data last week cooled
hopes for growth to begin accelerating in the third quarter,
thereby delaying a recovery in companies' earnings.
On Monday, the official China Securities Journal reported
that the combined net profits of the 846 companies listed in the
mainland that have posted first half earnings so far, had risen
only 1.7 percent.
Goldman Sachs analysts said in a report on Monday that while
demand for commodities in China has rebounded since June due to
a resumption of infrastructure projects, the rebound has not
been strong enough to absorb persistently high production and
Yanzhou Coal lost 2 percent in Hong
Kong after Goldman Sachs downgraded its Hong Kong listing from
"neutral" to "sell," while its Shanghai listing shed 1.2
CHINA PROPERTY HIT BY RENEWED FEARS OF STRICTER CURBS
The Chinese property sector was a big underperformer in
onshore markets on Monday, hit by renewed fears of stricter
enforcement of curbs aimed at6 cooling the real estate market.
The Shanghai property sub-index was down 1.7 percent at
midday, with Poly Real Estate diving 3.4 percent.
Shenzhen-listed China Vanke shed 2.5 percent. It
is still up almost 15 percent this year to date, but has lost 9
percent since official data on July 18 showed housing prices
increased for the first time in nine months, igniting fears of
more restrictions on the sector.
Despite pledges to adjust economic policy to boost growth,
Beijing has repeatedly said curbs on the property sector will
not be lowered, as the governments wants to make home prices
"We believe that some cities and regions may tighten presale
rules soon, including Hebei, Hubei, Hunan and Shandong," said
Bank of America-Merril Lynch China equity strategists in a
report on Monday.
These four regions were on the State Council's reprimand
list after its recent field investigation.
Other property-related sectors were also weak. Anhui Conch
Cement lost 3 percent each in Shanghai and
(Editing by Simon Cameron-Moore)