* HSI +0.6 pct, CEI +1.4 pct; CSI300 +3.8 pct,
* Bank, property rises on macro outlook, policy news
* China air pollution boosts energy and health care
* Li & Fung falls 15 pct on weak earnings
By Gabriel Wildau
SHANGHAI, Jan 14 Property and financial shares
led gains in Hong Kong and mainland China markets on Monday
following stronger-than-expected Chinese trade data last week
and a preliminary report of strong earnings growth at a
China's blue-chip CSI300 gained 3.8 percent after at one
point hitting its highest level since June, while the Shanghai
Composite Index rose 3.1 percent and closed above the
psychologically important 2,300 level at 2,312 points.
Hong Kong's Hang Seng Index closed 0.7 percent
higher, despite a 15 percent tumble in global exporter Li & Fung
Ltd after a profit warning. The China Enterprise Index
of top Chinese firms listed in Hong Kong outperformed,
rising 1.4 percent after touching its highest level since August
China trade data on Thursday showed exports rose 14 percent
in December year-on-year, far above expectations of 4 percent.
That raised investor hopes that demand from the
U.S. and Europe will support China's economic recovery this
"The strong export data makes people think the worst of the
European recession is already past," said Chen Yi, equity
analyst at Xiangcai Securities in Shanghai.
Financial stocks were also buoyed by a preliminary earnings
statement released by Industrial Bank after the
market close on Friday, showing net profit rose 36 percent in
2012, far above expectations. That raised hopes
that other lenders will also report strong earnings.
Banking shares gained strongly in both Hong Kong and
Shanghai, with HSBC climbing 1 percent. Insurer China
Life was up 2.9 percent in Hong Kong and
5.0 percent in Shanghai, and ICBC was up
0.9 percent in Hong Kong and 2.1 percent in Shanghai.
"Banking stocks are seen as quite strong as investors put
bets on the sector on hopes of good growth in earnings on the
improving economic environment, in particular tracking a solid
gain in the Shanghai market," said Alfred Chan, chief dealer at
Cheer Pearl Investment.
FINANCIALS, PROPERTY SURGE ON MAINLAND
Another feature of the mainland markets were gains made by
healthcare stocks and some large-cap energy stocks after air
quality in Beijing dramatically worsened and the city's
pollution monitoring centre warned residents to stay indoors.
Other northern Chinese cities were also affected.
The air pollution in north China over the weekend boosted
energy shares, as investors bet that policies aimed at curbing
pollution would lead big, listed companies to profit at the
expense of smaller players that could be harder hit by new
China Shenhua Energy rose 1.3 percent, while
PetroChina rose 1.7 percent.
The healthcare sub-index gained 2.8 percent as
consumers are expected to look for ways to protect themselves.
The mainland property sub-index rose 3.4 percent,
while financials were up 3.6 percent.
Also affecting real estate shares was comments from a senior
official in China's State Administration of Taxation, reported
in mainland media, that China is likely to delay the expansion
of its property tax pilot project to more cities beyond Shanghai
The Ministry of Land Resources said it would continue to
ensure sufficient land supply to prevent against big rises in
land prices that could feed through to home prices. That boosted
real estate shares by easing investor fears that spiraling land
costs would hit developers' bottom line.
Comments by China's securities regulator that authorities
could increase the size of the quotas through which foreign
investors can access the market by 10 times also boosted
sentiment, though the comments did not include a timeline for
any such increase.
SELECT HONG KONG SHARES FALL ON WEAK EARNINGS
Despite a strong tone in the main index, companies that
posted profit warnings were under heavy pressure.
Global supply chain manager Li & Fung tumbled to
its lowest level in three months after it warned of a steep drop
in core operating profit, taking investors by surprise and
triggering concern over its ability to reach a three-year
China's largest polysilicon and wafer maker, GCL-Poly Energy
Holdings Ltd, fell 4.3 percent after the company
announced that it expected to record a substantial loss in 2012
due to anti-dumping and countervailing duties imposed by the
U.S., and impairment and provisions against inventory and
Shares of Citic Telecom International Holdings Ltd
surged 13 percent after striking a $1.2 billion deal to gain
control of a Macau telecommunications company from Cable &
Wireless Communications Plc and Portugal Telecom SGPS SA