* HSI -0.4 pct, H-shares -1.4 pct, CSI300 -1.5 pct
* PBOC statement inflames tightening fears, hits banks,
* Chalco sinks after HSI exclusion, Lenovo up after
* AIA up, investors rotate into earnings safety
By Clement Tan
Feb 7 Shanghai shares were poised to snap an
eight-day winning streak on Thursday, deepening Hong Kong
losses, as investors booked profits on Chinese financials after
the central bank stressed on tackling inflation and containing
speculative housing demand.
With the official China Securities Journal reporting
first-tier cities may slow down the issuance of pre-sale permits
in the first half of the year, property shares fell.
The Hang Seng Index was down 0.4 percent at 23,155
points at the midday break, keeping above Tuesday's intra-day
low at about 23,104.3. The China Enterprises Index of
the top Chinese listings in Hong Kong shed 1.4 percent.
In the mainland, the Shanghai Composite Index was
down 1.3 percent, set for its first loss in nine days. The
CSI300 of the top Shanghai and Shenzhen A-share
listings was down 1.5 percent from Wednesday's 17-month closing
China needs to pay special attention to consumer prices, the
central bank said on Wednesday in its fourth-quarter monetary
policy report, a turnaround from its previous focus of
supporting economic growth.
"There's some rotation trade going on now, especially among
those who got in early in the rally," said Hong Hao, the Hong
Kong-based chief strategist at Bank of Communication
"But I think it's too early to start worrying about
inflation in the first quarter. If anything, the central bank's
statement shows demand is returning, although some form of
property cooling policy can be expected if prices keep rising,"
Chinese banks were among the top drags on benchmark indexes
in both on- and offshore markets. China Minsheng Bank
dived 4.3 percent in Hong Kong and 7.3
percent in Shanghai.
Before Thursday, Minsheng shares in both markets had surged
more than 100 percent from lows in early September as signs of a
recovering Chinese economy and low valuations spurred interest
in the bank's shares.
China Vanke, the country's largest property
developer by sales, slid 1.6 percent. The Chinese central bank's
commitment to contain speculative home demand followed the State
Council's late Tuesday statement affirming the gradual expansion
of property taxes to more cities.
In Hong Kong, China Resources Land lost 3.4
percent to its lowest since late December, while Shimao
Properties tumbled 5.4 percent in what could be its
worst daily loss in almost eight months.
Shares of Aluminum Corporation of China (Chalco)
fell 3.3 percent in Hong Kong after the index manager said late
on Wednesday that Lenovo Group will take its place as
a Hang Seng Index component from March 4. Lenovo's shares jumped
The announcement was part of a quarterly review that also
saw Haitong Securities replace ZTE Corp as a
component on the China Enterprises Index. ZTE's shares in Hong
Kong slid 1.8 percent, while Haitong shed 2.1 percent after
cornerstone IPO investors PAG sold a $150 million stake.
ROTATION IN PROGRESS
In Hong Kong, investors rotated into counters that have
lagged the rally from lows late last year as the corporate
earnings reporting season picks up after next week's Lunar New
AIA Group climbed 1.1 percent to its highest in
about a month. Four of 17 analysts raised their full year 2012
earnings-per-share estimate by an average of about 25.7 percent
in the last 30 days, according to Thomson Reuters StarMine.
Shares of Chinese food and beverage giant Tingyi Holdings
rose 2 percent in Hong Kong as sector peers Ajisen
Holdings and China Foods tumbled 8.7 and 14
percent respectively after warning about declining profits.