* HSI ends flat on the day, up 0.6 pct on the week
* CSI300 up 2.1 pct on Fri, jumps 6.7 pct this week
* A-share premium returns after month-long hiatus
* China brokers, insurers lead afternoon A-share climb
* China property weak on fears of more curbs
By Clement Tan
HONG KONG, Feb 1 China shares closed out their
best week in 15 months, helped by an afternoon surge on Friday
that also lifted the Hong Kong market from earlier losses rooted
in news an official survey of manufacturing activity in China
Markets began paring losses after a second, private survey
by HSBC showed growth quickening to a two-year high in January.
Both markets had started the day weaker after the official
purchasing managers index (PMI) eased to 50.4 for January, below
forecasts for a nine-month high of 50.9.
The Hang Seng Index closed flat on Friday, ekeing out
a 0.6 percent gain this week. The China Enterprises Index
of the top Chinese listings in Hong Kong climbed 0.7
percent on the day and 1.8 percent on the week.
Hong Kong turnover stayed under its average in the last
month for a fifth-straight session ahead of the U.S. non-farm
payrolls data later on Friday. Shanghai volume stayed relatively
robust, picking up in the afternoon as investors chased gains in
the brokerage sector.
In the mainland, the CSI300 of the top Shanghai
and Shenzhen A-share listings ended up 2.1 percent on the day
and 6.7 percent for the week. The Shanghai Composite Index
climbed 1.4 percent on Friday and 5.6 percent this week.
The outperformance of onshore markets over offshore peers
this week returned the Hang Seng China A-H Price Index
above the 100 level only for the second day since
mid-November, suggesting A shares are now trading at a slight
premium over H shares.
"January data may have been skewed by some methodology
issues, but if you look at the HSBC reading, which tends towards
smaller enterprises, it actually suggests the uptrend is
intact," said Hong Hao, chief strategist at Bank of
Communication International Securities.
For fund managers, "the greater dilemma is deciding how to
deploy the increasing amount of money coming their way after
such a big run up," Hong said. "That is raising concern that we
are due for a correction soon."
Pointing to that likelihood, short selling accounted for
about 9.6 percent of total turnover in Hong Kong on Friday,
above the historical 8 percent average, traders said.
On Friday, Chinese brokerages and insurers were among the
leading index boosts in the mainland after what a mid-sized
mainland broker attributed to speculation that some restrictions
on the sector may be lifted by end-March.
In Shanghai, Citic Securities climbed 3.7
percent while Haitong Securities spiked 5.4 percent.
Their smaller rival Founder Securities surged by the
maximum 10 percent limit.
Chinese insurers, considered a proxy play on the A-share
market given their high level of investment, were also strong.
New China Life Insurance rose by the maximum 10
percent limit, while Ping An Insurance jumped 5.3
Investors also chased gains for mid-sized Chinese banks.
China Minsheng Bank gained 8.9 percent in
Shanghai to complete its best week since April 2008, a 20.4
In Hong Kong, Minsheng rose 5.6 percent to hit a record
closing high. It is now up 31.3 percent since the start of the
year after a 33 percent gain in 2012.
Strength in the financial sector outweighed weakness in
other growth-sensitive sectors hit by China's underwhelming
official manufacturing survey. Steel conglomerate Citic Pacific
slid 1.1 percent in Hong Kong.
The Chinese property sector was weak after the official
China Securities Journal newspaper reported that China will
postpone expansion of a pilot programme to implement a property
tax and that Beijing intends to keep a tight lid on the real
estate market through other means in tier 1 cities.
A private survey showed average home prices in China's 100
biggest cities rose 1 percent in January from December, further
inflaming the day's jitters.
China Vanke slipped 0.4 percent in Shenzhen,
while in Hong Kong, China Resources Land fell 2.5
percent and China Overseas Land shed 2.3 percent.
Wynn Macau lost 2.3 percent, underperforming the
Macau casino sector after getting hit by its parent company's
underwhelming quarterly earnings.
This was further aggravated by data showing Macau gambling
revenue rose a lower-than-expected 7.3 percent from a year