* HSI, H-shares +1.1 pct; CSI300 +0.2 pct
* China banks, property, Tencent lead HK rebound
* Chow Tai Fook up 4.5 pct ahead of interim earnings
* Geely, Sunac dive after block sales priced at discounts
By Clement Tan
HONG KONG, Nov 29 Hong Kong and China shares
rose for the first time in four days on Thursday, after a
prominent U.S. lawmaker raised hopes of a deal to resolve the
U.S. fiscal policy standoff, but turnover was weak, pointing
fragile confidence in the market.
U.S. House of Representatives Speaker John Boehner voiced
optimism that Republicans could broker a deal with the White
House to avoid year-end austerity measures, just one day after
comments from U.S. Senate Majority Leader Harry Reid dented
hopes of a deal late on Tuesday.
The Hang Seng Index and the China Enterprises Index
of the top Chinese listings in Hong Kong both went into
the midday trading break up 1.1 percent.
"It's not the best time to be making big positional changes
now. Most investors are waiting for policy guidance on the
structural reforms the Chinese leadership has been talking a lot
about," said Alan Lam, Julius Baer's Greater China equity
On the mainland, the CSI300 Index of the largest
Shanghai and Shenzhen listings rose 0.2 percent, while the
Shanghai Composite Index edged up 0.1 percent from its
lowest closing level since January 2009 set on Wednesday.
Shanghai volume neared lows for the year, Hong Kong turnover
at midday was its lowest in nearly four weeks.
Lam said sectors such as Chinese property and
Internet-related names such as Tencent Holdings
present greater earnings clarity in the near to medium term.
On Thursday, Tencent rose 0.9 percent, recovering from
losses in the first three days of the week. It is now up 64
percent on the year, compared to the 19 percent gain on the Hang
Seng Index and a 5.8 percent rise on the China Enterprises
China Resources Land, one of two pure China
property components on the Hang Seng Index, went into the midday
break up 3.5 percent after earlier testing its highest intraday
level in more than three years.
The Chinese banking sector was among the biggest index
movers in Hong Kong, also recovering most of losses made earlier
in the week. China Construction Bank rose 2.1 percent,
while Industrial and Commercial Bank of China gained 1
The liquor sector was among the bigger index boosts on the
mainland after a contamination scare involving Jiugui Liquor
last week. Jiugui slipped 3.1 percent in Shenzhen,
but sector heavyweights Wuliangye rose 0.8 percent
and Kweichow Moutai inched up 0.3 percent.
A-share weakness this week has dragged the Hong Kong market
down all week, but in sign that domestic Chinese retail
investors could be preparing a return, the state-run China
Securities Journal newspaper reported that stock trading
accounts saw the first net inflow from bank accounts last week,
the first since the start of November.
HOW TO PLAY CHINA STRUCTURAL REFORMS
In their preview of the Chinese stock markets for 2013,
Goldman Sachs strategists said less volatility in China's GDP
growth will see the market shift focus from cyclical to
structural reform plays.
They reiterated mass market consumption as a theme for the
new year, expecting it to be supported by a policy focus on
safety nets and a reduction of wealth disparity.
Chow Tai Fook, the China-focused jewelery
retailer, which is the world's biggest by market cap, rose 4.5
percent ahead of its interim earnings expected after the market
close on Thursday. It is up 12.6 percent this month.
But a strong move against corruption by China's new
leadership would be negative for some consumer discretionary
names, said Julius Baer's Lam. Luxury brands such as Chow Tai
Fook, could suffer.
Eight of 24 analysts have downgraded their full year
earnings-per-share estimates for Chow Tai Fook by an average of
17.4 percent in the last 30 days, according to Thomson Reuters
Chinese automaker Geely Automobile declined 2.2
percent to HK$3.50 after Goldman Sachs Principal Investment Area
launched an up to $262 million selldown in an indicative range
of HK$3.30 to HK$3.40 each.
Property developer Sunac China Holdings lost 2.1
percent to HK$4.75 after local press reported Bain Capital
offered shares at HK$4.42 to HK$4.50 each, an up to 8.9 percent
discount to its Wednesday's closing price.