* HSI flat, H-shares +0.1 pct, CSI300 -0.3 pct
* Moutai sinks into negative on year, contamination scare
* AIA slips after Khazanah stake sale, AIG lockup expires
* Chinese urbanization policy plays still strong
By Clement Tan
HONG KONG, Dec 6 Chinese shares slipped on
Thursday, flattening gains in Hong Kong, as alcohol producers
came under renewed pressure over contamination fears.
Investors, however, continued to buy into Chinese
infrastructure-related and financial sectors, a day after
comments from the new Communist Party chief setting the economic
agenda for 2013 lifted the A-share market off four-year lows.
The Hang Seng Index was flat at midday after opening
at its highest intra-day level since August last year. The China
Enterprises Index of the top Chinese listings in Hong
Kong crept up 0.1 percent.
In the mainland, the Shanghai Composite Index and
CSI300 of the top Shanghai and Shenzhen listings each
slipped 0.3 percent from their respective highest since Nov. 14,
set on Wednesday.
China's top premium white spirit maker, Kweichow Moutai
dived 3.9 percent in Shanghai, dragging it into
negative territory for the year.
Up almost 30 percent at the end of October, Moutai shares
are now down 2.2 percent on the year after three straight annual
gains. This compares to a 6.2 percent decline for the CSI300.
Traders cited talk that independent tests on Moutai products
bought in Hong Kong could show further evidence of excessive
levels of plasticiser, an issue that has plagued the sector
since last month.
"If previous scares with Mengniu Dairy is any indication, it
will be a while before enthusiasm for these alcohol producers
return," said Edward Huang, an equity strategist with Haitong
International Securities, referring to a contamination case
involving the top milk producer.
Although shares of Mengniu is up 11 percent this
year and set for their first gain in three years, confidence has
been fragile since samples of its milk powder products in the
mainland tested positive for melamine in late 2008.
In Hong Kong, HSBC Holdings slipped 0.4
percent after Reuters reported that Europe's largest bank may
pay a $1.8 billion fine to U.S regulators as part of a
settlement over money laundering lapses.
Asian insurance giant AIA Group shed 0.8 percent
to HK$29.95, within the HK$29.84-HK$30.20 range that Malaysia's
state investor Khazanah Nasional Bhd's priced its
$360 million offering of AIA shares.
Khazanah's selldown comes ahead of the expiration of a
lockup on AIA shares for American International Group on
Thursday, when the U.S. insurer will be free to sell a stake
worth $6.4 billion at current market prices.
CHINA POLICY PLAYS STILL STRONG
Smaller Chinese banks extended Wednesday's gains after the
mainland's insurance regulator abolished investment limits on
the country's banks for insurance firms late on Tuesday.
Chinese insurers were previously prevented from investing in
more than two banks if their ownership of individual banks
exceeded 5 percent, a rule that had been in place since 2006.
China Merchants Bank rose 2.1 percent
in Hong Kong and 0.4 percent in Shanghai, while Beijing Bank
jumped 3.2 percent in Shanghai to a five-month high
and was the top boost to the CSI300.
Shares of Chinese insurers were marginally weaker on
Thursday after strong gains on Wednesday. China Life Insurance
slipped 0.2 percent in Hong Kong and 1.2
percent in Shanghai.
Chinese property counters were among the outperformers in
Hong Kong and mainland markets, extending their strong gains on
China Vanke rose 1.4 percent in Shenzhen, while
China Resources Land jumped 2.7 percent in Hong Kong,
stretching its gains on the year to more than 70 percent.
In comments published late on Tuesday and ahead of the
party's central economic planning meeting later this month, Xi
Jinping listed tax reform, urbanization and a bigger
price-setting role for the market as key objectives.
"Investors are aligning themselves along Beijing policy
lines more aggressively now after Xi Jinping's comments, but we
still lack details on the exact implementation," strategist